First: investors take decisions on the basis of what is actually happening in a country, not what the leaders of that country say. Mugabe himself, in the days when he was shooting his mouth off about socialism, used to say Judge me by my actions, not my words. That is precisely what investors do.
Especially at this time of economic upheaval throughout the world, investors are very picky about where they put their money. They are looking for a good return on their outlay, security for their personnel and their property, and a legislative environment in which they can operate fairy feely, without drowning in red tape. And the most certainly do not want to be fleeced by an army of public servants demanding brown envelopes before any kind of service is rendered. Nor do they want to be forced to make donations to geriatric birthday parties or political election campaigns.
The fact of the matter is that right now Zimbabwe is not an attractive investment opportunity. Even those who take a long term view, and are focused on life in Zimbabwe after Mugabe and Zanu (PF), are treading carefully.
Mugabe needs to understand that the reality on the ground in Zimbabwe today is completely anathema to a favourable investment climate. In case he doesnt know, let us spell it out:
Investors do not like:
– Indigenisation rhetoric and threats of nationalisation from the head of state;
– Racist rhetoric from the head of state;
– Widespread political violence, the perpetrators of which are never prosecuted;
– A partisan and corrupt police force unable or unwilling to provide basic security services;
– No security of tenure;
– An ever-increasing crime rate;
– An unstable currency;
– Bilateral investment protection agreements that are routinely thrown out of the window and not worth the paper they were written on.
– A Reserve Bank that routinely raids their bank accounts, and uses their money to buy plasma tvs for judges, ploughs for chiefs, fertiliser for minister and heaven knows what else.
Lastly, the practicalities of investing in Zimbabwe are a nightmare. Since the early 1980s there has been talk of a one-stop shop for investors, but nobody actually picks up the ball and runs with it. Investors are left to traipse around a number of different ministries and local authorities to get various permits and licences. Its one thing to have an investors conference. Its quite another ensuring that the enabling environment on the ground has been established.
Post published in: Editor: Wilf Mbanga