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Chinese investor dangles $1 billion for Ziscosteel revival

by Staff reporter
22 Mar 2018 at 05:47hrs | Views
CHINESE investor, Zhang Li, who is president of R&FA is in Zimbabwe to finalise the implementation of a $1 billion resuscitation of the Zimbabwe Iron and Steel Company (Ziscosteel), Southern Eye has learnt.

"He is in the country (Zhang left Zimbabwe on Tuesday) and as soon as an agreement is reached, the project should be implemented and this will be in two phases. The investor is ready," Chinese embassy counsellor, Zhao Boagang said.

Quizzed on why Zimbabwe had not benefitted much from Chinese investments into Africa, Boagang blamed it on Zimbabwe's toxic investment environment under former President Robert Mugabe.

"For example China has committed over $60 billion in investments and soft loans to Africa, but and indeed the bigger chunk of these has gone to South Africa, Mozambique, Zambia and Tanzania.

"But this is dependent on discussions. We do not just hand-out money. No company or investor says that, it's dependent on the environment and I must say the situation has improved," he said.

The Chinese envoy pointed out to electricity, labour and constraints around repatriation of foreign currency as impediments to Chinese investments.

Boagang, however, said Zimbabwe has benefitted from social aid from China.

"Of the $500 million that China has committed to Africa in the past few years, at least a third or more has benefitted Zimbabwe. The Zimbabwean government never complains because they know the details, they are aware. Zimbabwe enjoys a bigger share of the aid and we also provide loans," the envoy said.

Asked if the Indigenisation and Economic Empowerment regulations were also a reason for the slow pace in implementation of projects between China and Zimbabwe, Boagang said the fact that government was moving to amend the legislation shows it had realised this was bad for business.

"I do not need to answer that. The fact that it is being amended means you have realised that it has its limitations," he said.

In January, President Emmerson Mnangagwa promised Ziscosteel and Shabani Mashaba Mines, all in the Midlands province would be operational within his first 100 days.

However, there is still no activity at the two entities that used to provide thousands of jobs and downstream benefits into the economy at their peak.

Ziscosteel, which at its peak had a 5 000-strong workforce, officially closed its doors in 2016 and laid off its remaining workers without terminal benefits.

Most of its infrastructure, equipment and spares have either been vandalised or looted over the years of the company's redundancy.

In 2006, Indian firm Global Steel Holdings Limited courted Ziscosteel and was to inject $400m in a rehabilitate, operate and transfer arrangement.

However, an investigation by the Parliamentary Portfolio Committee on Foreign Affairs, Industry and International Trade revealed the deal would have disadvantaged Zimbabwe.

In 2011, Essar Africa Holdings's bid to take-over the moribund parastatal, in a deal worth $750 million, also hit a brickwall due to bickering in the inclusive government.

In response to questions regarding Chinese nationals and individuals accused of externalising funds, Boagang said the embassy would engage both Zimbabwe and those accused of externalisation.

"Some of the issues have already been resolved with the companies and individuals concerned," he said.

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Source - newsday

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