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Top investment opportunities in Zimbabwe for 2018

A new era of development

December 15, 2017 5:22 pm

A beautiful country that came under a rough patch is on the eve of revival. A new government vowed to improve the economy, rule of law and most notably to guarantee favourable investment and economic policies.

Chances are most outside investors are not going to buy it. Zimbabwe lost many big investors to other African countries due to the land reform, human rights abuses and a poor economy. All these past challenges and a new government that is spearheading a new dispensation present a lot of opportunities from a business stand point.

Agribusiness

Agriculture is the backbone of Zimbabwe’s economy inasmuch as Zimbabweans remain largely a rural people who derive their livelihood from agriculture and other related rural economic activities. It provides employment and income for 60-70 percent of the population, supplies 60 percent of the raw materials required by the industrial sector and contributes 40 percent of total export earnings. Despite the high level of employment in the sector, it directly contributes only 15-19 percent to annual GDP, depending on the rainfall pattern (Government of Zimbabwe, 1995).

Agribusiness is Zimbabwe’s untapped goldmine, and a major potential source of millionaires in 2018. According to a World Bank report, Africa’s agribusiness industry is expected to be worth $10 billion by 2030 if there are no political bouts once again in the country. With over 60% of poorly managed arable land, Zimbabwe surely has the potential to become the world’s biggest exporter of food products if the sector is lifted by the government and investors.

Africa’s one billion people provides a huge and ready market for agribusiness. What are the opportunities agriculture brings in Zimbabwe? Seed science, machinery and mechanisation, purchasing and supply, processing, insurance, banking among others.

Solar power generation

Solar plant

Solar energy is one of Africa’s most abundant natural resources. Most parts of sub-Saharan Africa enjoy more than 300 days of free God-given sunlight every year. Still, over 2 million people in the country, especially in rural areas, don’t have access to reliable electricity. In most cities and towns, power outages are the norm and people often have to rely on noisy petrol and diesel power generators. Solar energy is free, absolutely clean and abundant. And it provides the best alternative for people in remote parts of Zimbabwe who are out of reach of electricity grids.

Interestingly, some smart entrepreneurs are rising to the challenge of lighting up Zimbabwe through solar energy, and are very likely to join the millionaires club in 2018. Solar energy generation is one of fastest growing and most promising renewable energy sources of power generation worldwide. Nowadays, the electrical energy becomes one of the basic needs in our daily life, which makes increasing demand for it. A town can rely on solar energy, for example, the new northern suburbs in Beitbridge solely rely on solar power. Different manufacturing companies involved in the solar industry produce products as solar panels, frames, inverters, solar lights, solar gadgets, etc. Many of these companies will hire people at all levels as sales and production levels. In turn this helps to grow the economy

Real estate              

Zimbabwe’s real estate market is a multi-billion dollar opportunity, and several new millionaires will build their fortunes in this market.

In almost every corner of the country, real estate projects will emerge since there is vast of cheap virgin land. The biggest attractions and possible constructions are high-rise hotels and office buildings, residential homes and apartments, and shopping malls.

In Zimbabwe already there is a shortfall of 3 million housing units. The key markets for real estate on every investor’s agenda should be port towns/growth points, mining towns/growth points, farming towns/growth points. All of these areas experience a real estate boom in a viable economy.

Zimbabwe’s large and youthful population, an expanding middle class, increasing urbanization, influx of expatriates and multinational companies are the key drivers of demand for both commercial and residential real estate.

Insurance

When people accumulate wealth they need to protect their assets and investments. Where are the insurers?

Highlights

The insurance industry in Zimbabwe grew at a review period (2010-2014) compound annual growth rate (CAGR) of 27.7%. In terms of gross written premium, the top three companies in life segment accounted for 82.7% of the market share in 2015, while the top three funeral insurers accounted for 86.4% and the four largest non-life insurers accounted for 50.0%. To reduce operational expenses in terms of commissions paid to brokers, insurers are focusing on developing digital platforms – particularly mobile networks – to deliver the service. Over the forecast period, the process of recapitalization will improve the underwriting capacity, and result in more capable and reputable insurers in the Zimbabwean insurance industry. Developing consumer-centric products to provide insurance services to rural low-income population is expected to increase the penetration rate and drive the industry over the forecast period.

The Zimbabwean economy is recovering after registering extremely high inflation and external debt. The stabilisation and slow recovery of the economy followed the formation of the new government and the introduction of the multi-currency regime in 2009 has provided another opportunity for insurance companies.

Education

Students in class

The country is rich with creative and innovative talent. However, poor access to quality education is a serious threat to Zimbabwe’s vibrant human capital. What needs to be done to preserve the legacy of Africa’s most educated country? Building of more schools especially in resettlement areas, improve infrastructure of old schools, provide new furniture and learning material to schools in the country, advocate the importance of education among others.

Also, to note, parents’ concern and awareness has opened windows for the business opportunities for the pre-school and playschool sector in Zimbabwe. Especially the working parents, who cannot afford to spend enough time with their children, opt for day-care or playschools.

Technology has spread its roots in every nook and corner of business, leaving no room for old schools techniques or outdated modes of learning. E-books have opened gates of opportunities for owners of e-libraries and e-book clubs because knowledge knows no limits and everyone is equally curious to know anything and everything available under the sun.

For the aspiring edupreneurs and businessmen, educational tours are going to create a revolution as education is not limited to classroom teaching and there is a vast field waiting in the educational tour industry. It is time for edupreneurs to pull their socks up and tighten their shoe laces and explore the world-wide field of opportunities of the educational sector in Zimbabwe.

Retail

Across the continent, both local and international supermarket brands like Shoprite, Game, Checkers, Woolworths, Edgars and Spar are expanding as they scramble for every inch of available space in shopping and retail infrastructure developments.

Interestingly, the battle for retail supremacy in Zimbabwe won’t only happen in physical retail chains. eCommerce giants have grown quite impressively in the last few years. Both internet-based retail businesses now have a combined worth of over $1 billion in Africa.

In fact, the battle ground for Zimbabwe’s retail market will move beyond the continent’s shores. New eCommerce entrants now make it possible for Africans to shop directly from retailers in the USA, UK and China. Zimbabwe was known to have one of the fastest growing retail markets in the world in the 1990s. A large middle class, increasing local spending power, and a boom in the number of workers will fuel the shopping trend in the country. As an investor, what are you waiting for?

Healthcare

Africa’s growing middle class wants better services. The Zimbabwean healthcare sectors presents investors an opportunity to improve offerings. An influx of illegally imported drugs into the country, along with outdated technology and infrastructure, have not satisfied locals for quite a long time. The Ministry of Health currently does not have personnel stationed at ports of entry to stop illegal imports, but have stated aspirations to change this. Private players are welcome into the country.

Mining

Zimbabwe has the second largest reserves in the world of platinum and equivalently large diamond reserves. Gold and coal prospects are nothing to ignore. The capital requirements are too big for some investors while the typical politics of extractive industries confound other investors. The reality of the on-ground situation is less tricky than before since the new government softened the indigenisation laws. For those investors fearful of entering the extractive processes, there is value-add potential in downstream manufacturing. Another big opportunity lies in the processing of minerals. There are no functional manufacturing or processing plants in the country at the moment.

Tourism

Tourism industry in Zimbabwe has a lot of investment opportunities to offer. With its world class parks and wonders Zimbabwe needs to provide world class services as well and realise value of money in tourism. There are investment opportunities in all parks, games, reserves, world wonder site, monuments and historical cities and sites. What can be offers by investor? Tours, accommodation, guides, education, security, banking, games, documentary tours, hunting, surfing and food among others.

Apps and online services

There’s a digital revolution taking over Africa. These days, many services now have an app or are going online. Africa’s digital economy is growing really fast and in Zimbabwe everything was on standby.

If you are looking for a hotel, parking, restaurants, flights, car to buy, just to mention a few, you get an app that will help you get what you want. Tech savvy guys and investor, this is for you. In 2018, more apps and online services will launch in Zimbabwe to solve problems and provide value. And more millionaires will be made in the process.

Payment solutions

Every year in Zimbabwe, over $10 billion in transactions are still done in cash. This presents a huge and lucrative financial services opportunity for savvy entrepreneurs.

Telecash and Ecocash were introduced in Zimbabwe a couple of years back, the transformational mobile-based money transfer and payment services have proved to be phenomenal in the country, where the platforms handle over 10 million person-to-person transactions every year.

Now that the new leadership is giving hope intends to grow the economy, there should be a huge scramble for Zimbabwe’s next big money transfer and payment service. It’s a huge bet that has the potential to really pay off. Payment solutions will be a key area to watch in 2018.

Zimbabwean art

Dominic Benhura sculpture

In November 2014, a collection of antique African art from Mali, Gabon, Congo and Liberia was sold in New York at Sotheby’s for a record-breaking price of $41 million. This is the largest ever sum realized from the sale of African art in the USA.

Art as a business in most African countries is not considered a viable career option. Apart from South Africa and Egypt, art pieces from other African countries do not fetch a lot of money at international auctions.

After decades of neglect, both antique and contemporary works of Zimbabwean art are attracting high prices in the world’s major art markets. In 2018, more investors and collectors will be upping the demand for Zimbabwean art, and more millionaires will be made in the process.

Internet access

It’s no surprise that tech giants like Google and Facebook are scrambling to improve internet access to millions of Africans. Google’s Project Loon and Facebook’s Free Basics are just two of several bold initiatives to connect Africa. However, some smart African entrepreneurs are already making impressive moves to conquer the internet access market.

What kind of investors are wanted? Mobile networks providers, cellular manufacturing and suppliers, Internet providers and technology schools.

Author: Gesture Taidza Chidhanguro ©

 

Top investment opportunities in Zimbabwe for 2018 Reviewed by on . A beautiful country that came under a rough patch is on the eve of revival. A new government vowed to improve the economy, rule of law and most notably to guara A beautiful country that came under a rough patch is on the eve of revival. A new government vowed to improve the economy, rule of law and most notably to guara Rating: 0
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