But the decision should not come as a complete surprise as some of Qatar’s biggest firms have been more than ready to invest in countries which are pretty near the bottom of the popularity charts with the world’s one superpower – the US. Real estate developer Qatari Diar has launched projects, and made acquisitions, in uncontroversial locations such as London, Oman and Morocco but it has also moved into alleged ‘state sponsors of terrorism’ too.
Venessia’s main investment in Zimbabwe will be a 120,000 barrels per day oil refinery in the capital Harare. The plant will cost around $1.5bn to build and designs are likely to be drawn up once a feasibility study has been completed before the end of the year. The facility will receive crude from the Middle East, and quite possibly from Qatar itself, according to the Reuters news agency.
The second part of Venessia’s plan involves the construction of a five star hotel, also in the capital, at a cost of around $136m. Venessia’s GM Jawhar Zaidi told the news agency that his firm was ‘not worried about the political situation’ in Zimbabwe as its overseas arm, Venessia General Trading, had been operating in the region for a while.
But the situation in Zimbabwe couldn’t really get much worse. President Robert Mugabe’s understandable desire to kick back at decades of colonialism has seen his government undertake an unremitting policy of land resettlement which has seen thousands of white-owned farms handed over to poor, disadvantaged blacks.
The result, sadly, has been the total hamstringing of one of Africa’s most successful agricultural producers and, with it, the collapse of the economy. Inflation now runs at a whopping 6,600 per cent, while unemployment and poverty affects 80 per cent of the population. Mugabe, meanwhile, has alienated himself from all of the West’s movers and shakers.
Venessia would do well to keep an eye on developments in the US and the European Union as economic sanctions, in addition to those already imposed as a result of Mugabe’s violent suppression of political opponents, are a possibility and such a development would hardly be good for any fledgling business. In addition, the government has just passed a law whereby foreign firms will have to cede majority ownership to locals.
Venessia’s move into Zimbabwe may raise a few eyebrows but real estate developer Qatari Diar was the trail blazer into seemingly unstable parts of Africa. Last year, this column reported on the firm’s move into Sudan, which was labelled as a state sponsor of terrorism by the US in 1993. Diar announced a major mixed use complex on the banks of the Blue Nile in Khartoum last autumn, covering one million square feet and featuring a five star hotel as well as villas and offices.
The crisis in the western region of Darfur, which has seen hundreds of thousands die in fighting, and of starvation, and millions more displaced as refugees, is not going to sit easily with companies looking to set up a base in the country, but with Sudan now the third largest oil producer in Africa, Khartoum is considerably more stable and the economy is set to grow by 11 per cent this year. The Qatar Islamic Bank is now looking into setting up a new financial institution in the country, while another Qatari property developer, Barwa Real Estate, is eyeing up investment opportunities.
Firms like Qatari Diar have been able to tap into their close cultural ties with Sudan in a way that sceptical western nations are unable to, with the majority of the Sudanese population being Muslim and Arabic being the most widely used language.
Qatari Diar has now followed a similar path into neighbouring Eritrea, another nation that causes concern to the likes of the US administration. The company unveiled plans to build a number of ‘tourism projects’ on Dahlak Island back in January of this year and the firm’s CEO Nasser Hassan Al Ansari said at the time the deal demonstrated its commitment to Africa.
Qatar is not the only Gulf state looking to tap into Africa’s tremendous potential. Firms from across the Middle East have long-standing business links, and investments, in a host of North African countries like Egypt of course, but many companies are now looking elsewhere on the vast continent.
Kuwait’s telecommunications outfit Zain offers a service in Sudan and through its Celtel subsidiary has a presence in 14 more African countries, while UAE based rival Etisalat is operating in seven nations via its Atlantique Telecom subsidiary.
But this is merely the tip of the iceberg as countries from Djibouti to Guinea are starting to feel the impact of serious Arab investment. With the almost fearless approach some Gulf based countries have adopted regarding the break-neck speed of their own development, it is hardly surprising that they have the nerve and self-belief to go where others fear to tread.
Wednesday, October 17- 2007 @ 16:52 UAE local time (GMT+4) Replication or redistribution in whole or in part is expressly prohibited without the prior written consent of Mediaquest FZ LLC.