Zimbabwe has strengthened ties with the UAE, which has invested $1.4 billion since 2022, becoming its largest export partner. This investment aligns with the UAE’s ambitions in Africa while Zimbabwe grapples with a $21 billion debt and inflation issues. The partnership offers economic hope but requires broader reforms for lasting stability.
Zimbabwean President Emmerson Mnangagwa’s six-year initiative to foster relations with the United Arab Emirates (UAE) has significantly benefited the country, which has faced Western sanctions for 25 years and struggles to repay debts to China. The UAE has emerged as Zimbabwe’s largest export partner, investing approximately $1.4 billion in various sectors since 2022, such as gold trading and real estate, marking a strategic effort to extend influence across Africa.
In Mount Hampden, a notable project is being developed by Dubai businessman Shaji Ul Mulk, which aims to establish a new “cyber city” to revitalize the capital, currently in disrepair. Additionally, agreements are being formed with firms such as the Dubai Gold & Commodities Exchange to create a gold market, reflecting the growing economic collaboration between the nations.
Despite these ventures, Zimbabwe still faces significant economic challenges, including a substantial debt exceeding $21 billion and high inflation hindering economic stability. The country has made six attempts to establish a viable local currency over 16 years, highlighting ongoing financial difficulties that complicate business operations.
Gulf states like the UAE leverage their financial resources to gain a foothold in Africa, especially as other traditional investors like China and Europe reduce their involvement. The UAE has committed $110 billion in investments across various sectors in Africa, focusing on strategic nations for potential high returns, which often involves overlooking inherent risks.
The UAE’s investment interest in Zimbabwe intensified following Mnangagwa’s 2019 visit aimed at attracting foreign investments amid economic downturns caused by sanctions and mismanagement. The attractiveness of Zimbabwe’s gold production, which reached a record output of 36 tons last year, has played a crucial role in this relationship and investment strategy.
The geopolitical landscape has changed, with the UAE stepping in as a strategic investor in Zimbabwe amidst the latter’s long-standing economic isolation from the West due to sanctions and a history of debt defaults. The shift toward the UAE reflects a broader trend of resource-rich Gulf states seeking influence in Africa as traditional economic partners face challenges in maintaining their investments and operations on the continent. Zimbabwe’s economic struggles are compounded by significant debts and attempts at currency stabilization, making the UAE’s investments noteworthy in terms of potential asset recovery and economic revitalization.
The UAE’s emerging role as Zimbabwe’s largest trading partner is significant given the country’s challenging financial landscape and isolation from Western investments. This partnership, underscored by substantial investments, particularly in gold, offers Zimbabwe a potential path to economic revitalization. However, for long-term stability, comprehensive economic reform addressing debt and enhancing fiscal strategies is crucial. Collaboration with the UAE may just be one piece of a puzzle for sustainable growth and recovery.
Original Source: www.newzimbabwe.com
