th a Central Statistics Office report issued last week stating that Zimbabwe got a trade surplus of Z$16,8 trillion after recording annual imports of $145,4 trillion against export revenues of $161,8 trillion last year.
The UN’s World Investment Report 2006, published by the United Nations Conference on Trade and Development (UNCTAD), reveals that FDI inflows into Zimbabwe declined from a peak of US$444 million in 1998 to just US$2 million in 2006.
According to the report, Zimbabwe was the worst in Africa out of the 194 countries surveyed by UNCTAD during the past year for their competitiveness in attracting and retaining FDI.
The virtual collapse of the amount of FDI into Zimbabwe means that the country’s share of the total inflows in the world has progressively dried up in the past few years against a backdrop of an unprecedented flight of capital spawned by the government’s policies.
Analysts this week warned that FDI inflows into Zimbabwe would tumble further this year as foreign investors take flight in the wake of President Robert Mugabe’s threats to nationalise foreign-owned mines and industries.
The 83-year-old leader, who won a disputed election in March 2002 and currently faces the toughest test of his 27-year rule, has repeatedly threatened to take over companies he accuses of economically sabotaging his government.
The threats, which come on the heels of his policy to seize land from whites, have further scuttled the country’s chances of winning back foreign investors who have left in the past seven years due to worsening economic fundamentals.
“The main issue is the sovereign risk factor and most investors are wary of the Indigenization legislation currently before Parliament,” said an analyst with a leading Harare financial services group.
Investors are worried about the impact of Zimbabwe’s foreign currency crisis on their ability to repatriate dividends.
Stockbrokers estimate that foreign investors are sitting on trillions of dollars worth of dividends and profits that they have been unable to repatriate from Zimbabwe due to the shortage of hard cash since 1999.
The UNCTAD report assessed countries based on their performance on key economic and policy indicators such as gross domestic product growth, exports, the number of telephone lines, inflation, country risk, property rights, trade policy, corruption and FDI regulations.
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