Chinese investment grows in Zimbabwe
Nevanji Munyaradzi Chiondegwa
The past week, Zimbabwe saw two multimillion agreements with two Chinese linked businesses being announced.
As China`s investment footprint on the continent increases, Zimbabwe has been among the major beneficiaries of the drive due to the alignment of the two country`s outlooks on development.
China’s Sinomine bought Bikita Minerals in a deal worth US $180 million.
Sinomine Resource Group is to spend US$180 million to buy a controlling stake in Bikita Minerals, Zimbabwe’s oldest lithium producer.
Through its Hong Kong-listed unit, Sinomine is buying 100% of African Metals Management Services and Southern African Metals & Minerals, the Mauritius-registered companies which hold a combined 74% in Bikita Minerals.
The acquisition is still subject to approvals by governments of China, Mauritius, and Zimbabwe, Sinomine says.
The company also plans to buy out the other shareholders to gain 100% of Bikita Minerals.
The other shareholders are Dzikamai Mavhaire who holds 16% and Nehemiah Mutendi who holds 5.2%.
Zimbabwe is also set to begin assembling buses next month. The public passenger company, ZUPCO made a commitment to buy 60% of the coaches.
The company that will be assembling, Amalgamated Bus Industries (ABI) is a consortium of local public transport operators and has already acquired assembly kits worth US$7 million for the venture.
ABI, which recently secured a US$35 million loan from Chinese investors to revive local bus manufacturing, has since entered into a partnership with Deven Engineering. It has also signed memoranda of understanding (MoUs) with AVM Africa and Quest Motor Corporation.
Two key enablers made the transaction successful; Chinese funding and market guarantee from ZUPCO and US7 million kit guarantee from transport companies.
Zimbabweans are beginning to see that beyond the Sinophobia, China is not as bad as alleged by the West.
China is buying from white owners looking for buyers and the Chinese, who are at less risk of being by sanctions are snapping up the deals.
The Chinese funding has seen telecoms billionaire Strive Masiyiwa sourcing and obtaining Chinese finding because sanctions on Zimbabwe had led him to fail to secure loans to expand his Econet business in Zimbabwe.
Mining companies that are trying to expand or exit Zimbabwe are failing because of lack of funds and unless they are prepared to wait for the profit to build up and re-invest, which is a long process unless they ask for Chinese loans.
Other than China and Russia it is not easy for to finance Zimbabwean transactions.
China is the only country that was least affected by the Covid-19 pandemic. Rather it is the only country which made money from Covid-19, every other country had challenges.
President Xi took the lead in acquiring assets outside China.
China is the new go to country for funding and investment, Zimbabwe appears to have understood the concept early.
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