South African Corporate Expansion into Zimbabwe: Weathering the Storm and Reaping the Benefits

Abstract

As the terms of Zimbabwe’s negotiated political settlement were being concluded between the ruling Zimbabwe African National Union-Patriotic Front (ZANU-PF) and the Movement for Democratic Change (MDC) in the latter half of 2008, much of the concern focused around the dynamics of the power-sharing formula. With battle lines drawn over who should control significant portfolios such as the security forces and home affairs, it seemed that the protracted negotiations resolving the crisis over Zimbabwe’s acute political and economic decline had reached another stalemate. While the political pundits were trying to tease out an acceptable power-sharing framework, the dynamics of Zimbabwe’s post-conflict economic reconstruction had also become the subject of much debate.

In future, the recovery of Zimbabwe will bring significant benefits to the South African economy through increased employment, export earnings as well as remittances from profits earned by subsidiaries situated in Zimbabwe. Therefore, the assistance advanced to Zimbabwe by the South Africans will result in a win win situation for both countries.

—Elton Mangoma, Zimbabwean minister of economic planning and investment promotion, March 30, 2009

Some South African companies are even using the crisis, or are planning to use the crisis, to take over large swathes of the Zimbabwean economy. They are not alone in attempting to do so. British, French and Chinese companies are attempting to do exactly the same thing. Time will tell which countries’ capital will benefit the most out of this macabre race. One thing that is certain, however, is that the corporate vultures are descending; and this is happening at the cost of Zimbabwe’s remaining, and limited, sovereignty.

—Shawn Hattingh, October 4, 2007