HARARE For the first time in a decade President Robert Mugabe last week had opportunity to discuss business with Western investors he has previously accused of seeking his ouster -- but it remained to be seen whether the historic encounter was enough to calm the nerves of the anxious foreigners. More than 100 foreign investors drawn from Africa, Europe and other places converged in Harare for Zimbabwes first international investment conference following the launch of a coalition government nearly five months ago.
The investors, among them company chief executives and fund managers drawn from more than 20 countries, are keen on acquiring shares in high-flying companies listed on the Zimbabwe Stock Exchange and financial institutions in return for an injection of fresh capital.
Zimbabwe requires at least US$10 billion to rebuild its economy and revive social services that had collapsed due to a decade of neglect.
But in typical Mugabe-style, the Zimbabwean strongman saw a British hand in Harares economic crisis and stunned the gathering by telling the more than 4 000 white commercial farmers dispossessed of their land to demand compensation from London.
Investor fears
In a move unlikely to allay investor fears, the Zimbabwean leader insisted that his government would pay for nothing more than improvements made on farms by the former land owners.
“That’s our obligation and we have honoured that, Mugabe said, urging the aggrieved white farmers to join forces with the Zimbabwean government to push for compensation from Britain.
Mugabe has repeatedly accused Britain of reneging on an agreement reached at Lancaster House in 1979 under which London pledged to fund the acquisition of land from white farmers by Zimbabwes post-independence government.
Analysts said Mugabes fixation with accusing the British would do very little to convince a sceptical investor community that the winds of change are blowing in Harare.
And as is if to remind the gathered investors that nothing much had changed in Zimbabwe, militant Zanu (PF) party supporters last week invaded a private mine in the south-eastern Bikita district, reportedly acting on behalf of powerful officials of Mugabes party wanting to takeover the mine.
I dont think this will help in restoring investor confidence, particularly in light of the recent statement by the former British ambassador who said that Britain has no moral obligation to pick up the cost of compensating the former white farmers, said University of Zimbabwe business lecturer Tony Hawkins.
Convenient myths
Former British ambassador to Zimbabwe Andrew Pocock last month described claims by Mugabe that Britain reneged on the Lancaster House agreement to fund land reform as one of the convenient myths that have dogged the British/Zimbabwean relationship.
Mugabe has openly condoned actions by mobs of his supporters who have continued to terrorise remaining white farmers despite a Global Political Agreement (GPA) signed with former archrival Morgan Tsvangirai under which the two leaders agreed to halt illegal farm occupations.
Analysts believe that besides the unresolved issues dealing with Zimbabwes chaotic land reforms, the onus was also on Mugabe to address a host of other pressing matters such as guaranteeing freedom of expression, corruption, press freedom and ending the selective application of the law.
Investors also want to see how he would resolve the issue of the contested appointments of Reserve Bank of Zimbabwe Governor Gideon Gono and Attorney General Johannes Tomana.
His actions with regards to this issue will largely be taken by investors as a barometer of how things will be run by this government. It will show who wields real power between Mugabe and Tsvangirai and, for obvious reasons, we are all praying Mugabe will not have his way because that will spell disaster for this economy, said an analyst with a Harare-based commercial bank.
Adequate safeguards
Economic Planning and Investment Promotion Minister Elton Mangoma, whose ministry organised the conference, said foreign investors were jittery about pumping money into Zimbabwe until adequate safeguards are in place to guarantee the protection of their investments.
They are justifiably nervous after Mugabes previous government radically and violently enforced indigenisation and nationalisation laws in the agricultural sector.
There is also the fear of expropriation like what happened during the land reform programme where people lost their investment and the compensation has not been paid for that.
Mangoma said although there was increased interest in Zimbabwe among international investors following Tsvangirais re-engagement tour of Europe and the US, political stability and policy consistency remained an issue.
Democratisation agenda
The politics in Zimbabwe has largely been the one determining whether people come in with their investment or not. The three principals to the GPA will talk about the politics, the GPA and the democratisation agenda, said Mangoma.
Mangoma said the government had shelved proposed amendments to the Mines and Minerals Act and would rationalise radical indigenisation laws and policies to ease investors fears.
Amendments to mining laws demanding foreigners to offload 51 percent of their shares to locals and hand over a free 25 percent stake to the government caused major anxiety among investors who feared nationalisation.
The Mining Bill is off the table. There is more consultation that is going to take place. There is more consultation on what we should be doing and not doing, said Mangoma.
Zimbabwe desperately needs foreign money to kick-start an economy that had collapsed following a debilitating decade-long economic and political crisis.
Post published in: News