Zimbabwe's economy attracts US
New York — Zimbabwe, into its second year of independence, is beginning to attract US businesses. One of the first signs that Robert Mugabe, the country's nationalist leader, is having some success is the move by Citibank and the First National Bank of Boston to establish representative offices in Harare, formerly Salisbury when the country was known as Rhodesia.Citibank's president, William I. Spencer, formally openend the bank's office on Tuesday, Sept. 15 while First National Bank of Boston opened its office a few months ago.
The Boston bank, in fact, has advertised its presence in Zimbabwe with full-page ads in the Economist, a British publication, and has made its one man office there a regional office, covering its banking needs in Malawi, Botswana, Mozambique, Zambia, and Namibia.
According to Washington sources this interest by the banks has been spurred in part by the Reagan administration which has decided that Zimbabwe is important to US interests. The US imports a significant portion of its chrome from Zimbabwe and the country is rich in natural resources. "Zimbabwe has one of the most balanced economies in Africa," says a Washington diplomatic source. And, even though Mr. Mugabe has declared that his country's economic bent is socialist, Washington sources say they consider Zimbabwe's economic climate "favorable" to private business.
At Citibank, a spokesman says the bank decided to establish a representative office after some study and analysis. "The economy was like a black box for us, " says the spokesman, "so we had to do a feasibility study prior to going in." US banks and business abided by the United Nations economic boycott of Rhodesia. Only chromium, which is considered a strategic mineral, was imported into the US.
What the bank says it found in its study was an economy "rich in agriculture, minerals, and human resources."
It also found that its civil war, which had pitted the white ruling minority against the black majority, did little substantial lasting damage to the economy. "Neither party tried to destroy the infrastructure," commented a bank spokesman. "Certainly it was run down and maintainence suffered, but there was still something there for the current government to inherit."
The Boston Bank says it, too, feels good about the strength of the Zimbabwe economy. "We hope to get involved in the financing and importing of heavy equipment, and the financing of plants and warehouses," says a spokesman for the bank.
The US banks will find the foreign banking presence there still limited. According to one banking source the only major foreign banks in Harare are Barclays, Standard Chartered, Grindlays, and the former Netherlands Bank of South Africa which has since been taken over by Middle Eastern interests. Although Citibank has an interest in Grindlays through its London subsidiary, it was forced by the economic boycott to sever all contacts with the Salisbury bank.
Although both banks have stated that they would like to participate in any international financing by the Mugabe government, analysts point out that Zimbabwe has no international debt. However, it still has some debts to South Africa. Bankers, however, are optimistic that as the economy develops, project financing will become important. Citibank says that it the domestic banking situation looks promising it might consider applying for a license to operate a domestic bank. Until then, both banks will only do international banking.
In spite of the move by the two US banks, other banks contacted said they had no immediate plans to open up branches in Zimbabwe. At Chase Manhattan Bank, for example, a spokesman says, "We will continue to work out of our Nairobi office. Our representative visits Zimbabwe two weeks out of every month since there is financial traffic going on."