As for the rest of the continent, Africa in 2007 “confounded the expectations of many pessimists except of course for Zimbabwe, regional tensions in the Horn of Africa and fragility in the Sahel “continue to challenge investors.”
Control Risks conducted an extensive study of political and security risk around the world for investors, published in a report, Risk Map 2008. The report found that on the whole the continent is seeing a divergence between “those countries that are stable and developing, and those that are politically and socially volatile, and economically stagnating.”
The report says that while other southern African countries are progressing satisfactorily, the “precarious economic situation in neighbouring Zimbabwe will continue to fuel concerns over a regional spillover effect, migration and rising crime levels.”
Control Risks claims that despite an endorsement of President Robert Mugabe by his party, the Zanu-PF, as its presidential candidate, there are signs, the report claims that his departure from office “have increased.”
This assumption is based on a bill passed by parliament in September that could enable Zanu-PF to endorse an anointed candidate through a parliamentary vote. The report says, “even if Mugabe manages to secure another victory at the polls, he will come under redoubled pressure from all sides to retire within one year of the election.”
The report endorses President Thabo Mbeki’s ‘quiet diplomacy’ as having the effect of ensuring the Southern African Development Community (SADC) “remains engaged in mediation, which will represent a formidable test for the body.”
Control Risk Africa analysts claim “it is obvious that a broader political deal – potentially including a colation incorporating the opposition – will be needed to ensure any orderly transition of power.”
It is acknowledged that the political and economic situation has “deepened” the humanitarian crisis in Zimbabwe including the potential for political unrest although, the report says, Zimbabwean security forces “will be employed to prevent an outright uprising”.
Control Risks cautions investors over Mugabe’s recently introduced bill setting ‘indigenisation’ requirements, which the report explains means ‘nationalisation and expropriation, as it will highlight investor concerns over the “capriciousness and hostility of government dealings with business.”
The report further warns that “inflation is likely to render business finance tricky and the utility-supply situation is set to worsen.” It anticipates a worsening of law-and-order and further political repression, increased crime levels.
In its final analysis, the report says: “Even if a political solution can eventually be found, Zimbabwe’s road to recovery is likely to be arduous, and a volatile mixture of vested political interests, politicised security force and extreme popular hardship will require careful political management.”Â
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