EXCHANGE rate volatility has emerged as a significant obstacle for Swedish companies looking to invest in Zimbabwe, with investors seeking a more stable and predictable business environment, businessdigest can report.
This comes as trade between Zimbabwe and Sweden remains low.
According to the Observatory of Economic Complexity, an online data visualisation and distribution platform focused on the geography and dynamics of economic activities, Sweden exported goods worth US$21 million to Zimbabwe in 2023.
Conversely, Zimbabwe exported goods worth US$1,22 million to Sweden, with the top products being ferroalloys, raw tobacco, and citrus. Sweden’s main exports to Zimbabwe included blank audio media, broadcasting equipment, and other plastic products.
Over the past five years, Sweden’s exports to Zimbabwe have increased at an annualised rate of 2,94%, while Zimbabwe’s exports to Sweden have decreased by 11,6%.
“One major problem has been the exchange rate fluctuations. As investors, they want to know what will happen tomorrow and next month,” Sweden’s Ambassador to Zimbabwe, Per Lindgärde, told businessdigest in an interview.
“They seek predictability, and sudden changes in the exchange rate are a concern for many. However, I know the government is also looking into exchange rate liberalisation, particularly how to narrow the gap between the official and parallel rates concerning the US dollar.”
He expressed hope for increased trade and investment between Sweden and Zimbabwe.
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“For example, some Swedish mining companies operate in South Africa, where products are manufactured before being exported to Zimbabwe. This isn’t reflected in the official trade statistics between Zimbabwe and Sweden,” Lindgärde said.
“We would like to see much more trade and investment between our countries. That’s why we initiated the Swedish-Zimbabwean Sustainability in Mining Expo. We already export mining equipment and machinery, but I believe we can do even more together.”
The expo was held last Friday in Harare.
“Currently, Swedish companies are not heavily focused on investing — meaning setting up production in Zimbabwe. The immediate priority is trade — selling Swedish products,” Lindgärde said.
“However, some companies are exploring opportunities in renewable energy, such as solar power and solar collectors for local production. But there are unresolved issues, so the current emphasis remains on trade.”
He said more investments could follow.
“However, Zimbabwe’s investment climate needs further improvement. I know the government is closely examining this and plans to take additional steps to create a more enabling environment for investments,” Lindgärde added.
