And despite the flaws of the unity government, the economy is starting to turn around. 

The introduction of hard currency has been the biggest factor in restoring a sense of normality and is allowing companies to gear up for a new era. International companies that were forced to ring- fence their Zimbabwe operations as a result of hyperinflation are now bringing them back into the fold. Tongaat Hulett reports that it will include its Zimbabwe sugar operations in its financial statements this year as many of the distortions of macroeconomic fundamentals had been removed.

There is also new capital being injected into Zimbabwe business. SABMiller injected working capital of 16m into beverages group, Delta Corporation, in which it is a shareholder, earlier this year and more multinationals are likely to shore up the capital base of firms in which they have an interest as the market opens up.

Regional expansion, a necessary hedge for companies to survive in the past, is continuing. Hotel group African Sun is expanding into Nigeria. Diversified conglomerate TA Holdings is to ply its insurance business in Uganda . Manufacturers are increasing production now they are able to source inputs in foreign exchange and activity on the stock market is growing.

But the corporate sector, under severe pressure for most of the past “lost decade” (as Zimbabweans refer to it) is not out of the woods yet.

The banking sector, which has had a rough ride in trying to survive the economic meltdown, faces more hard times. With the government’s September deadline for financial companies to meet new capitalisation requirements, a shake-out of the 28 companies operating in this overtraded sector is likely. Local banks will be targets for hungry investors. SA’s First National Bank and Nedbank are interested in the market and Nigerian banks are also sniffing out opportunities.

A period of local merger and acquisition (M&A) activity is possible in other sectors as companies align themselves in a new economy. M&A activity was a survival strategy for companies over the past few years, as they sought to build critical mass as a way of countering difficult times. Not all of these worked out well. The 2007 merger between Meikles Africa, Zimbabwe’s oldest company, with Kingdom Financial Holdings, has just been through a messy “divorce” after months of ugly wrangling.

Corporate Zimbabwe has suffered scandals, business failures, corruption, political patronage, extreme government interference and threats of nationalisation. Transparency and the application of corporate governance principles, once standard in the country, were affected in the quest for survival in the country’s corrupt political environment. The new foreign interest in companies has forced these issues back on the table.

The lack of transparency in deals related to government contracts and the large numbers of corrupt politicians in the business sector are other factors that coloured the corporate landscape in the recent past. From murky deals in the Congo up to mainstream companies hiding dubious activities under the cloak of hyperinflation and black market deals, a lot of dodgy things have been happening in Robert Mugabe’s Zimbabwe.

A fund manager with Zimbabwe investments says the combination of a bull market for cheap stocks and economic distortions meant investors had not always policed their assets or the underlying governance of the companies themselves in the past. In the relative euphoria of the new economy, it would be easy to sweep away the past, but the many dubious deals done under Zanu (PF) rule and the compromises in corporate governance are realities that will be unearthed in an era of greater scrutiny.

Zimbabwe remains a risky investment destination and the public and private sectors need to put their houses in order to build trust in the integrity of the country — and with it, credibility.

Games is CE of Africa @ Work, a research and consulting company.