Investors already knocking on Zimbabwe’s door

Investors around the world are keeping a close eye on Zimbabwe as the country experiences a political shift under new leadership. The recent swearing in of President Emmerson Mnangagwa has sparked optimism among market players, with many viewing him as more market-friendly than his predecessor, Robert Mugabe. Wildu du Plessis, Head of Africa at Baker McKenzie, highlighted the positive reception to the political change in Zimbabwe, stating that it has already attracted a significant interest from clients and potential investors. Du Plessis emphasized that while the country faces challenges in the short term, the groundwork has been laid for substantial economic transformation. One of the key themes discussed during the interview was the potential for increased global M&A activity, with significant projections pointing towards a three trillion dollar market. Du Plessis noted that heightened global growth has set the stage for a surge in market activity, a trend expected to extend to regions like Europe and the US. However, the focus of the discussion shifted towards Africa, particularly delving into the economic landscapes of Zimbabwe, South Africa, Nigeria, and the implications for deal-making in the region. In Zimbabwe, the recent political developments have generated a sense of hope among investors. Du Plessis highlighted the inquiries from clients regarding the impact of the political transition on sanctions and market openness. With Zimbabwe poised for a gradual economic recovery, sectors such as retail, farming, oil, and gold are primed for expansion, presenting investment opportunities for interested parties. The interview underscored the potential for a significant uptick in deal activity in Zimbabwe, building on the modest numbers observed in the first half of 2017. Moving to South Africa, the discussion touched upon the country's struggles with political uncertainty and economic challenges. Despite facing obstacles, South Africa is on an upward trajectory in terms of deal activity, with projections indicating a slight decrease in M&A transactions in 2018, followed by a gradual increase in 2019. The impact of political instability on investment inflows was a key point of discussion, with South African corporates looking beyond their borders for investment opportunities. Nigeria, another prominent African economy, mirrored South Africa's trends with subdued deal activity in the face of policy uncertainties. However, expectations for a resurgence in deal-making in the coming years signal a shift towards more favorable economic conditions. The interview highlighted the challenges of attracting foreign capital and navigating regulatory landscapes, factors that play a crucial role in shaping investment prospects in African markets. In addition to the African markets, the conversation touched upon global deal activity, notably in the US and Europe. The US market, which experienced a period of uncertainty, is expected to rebound with increased electrification and economic stability. Similarly, the European market, despite Brexit uncertainties, is projected to grow in the coming years, signaling positive signs for deal-making opportunities. As global economic dynamics evolve and regional markets undergo transformation, investors are closely monitoring opportunities in emerging economies like Zimbabwe and established markets in the US and Europe. The interview with Wildu du Plessis shed light on the interplay between political changes, economic factors, and market activity, painting a nuanced picture of the investment landscape in Africa and beyond.