Investment inflows drop 25 percent

investment_inflowsHARARE Foreign direct investment inflows into Zimbabwe slumped by 25 percent in 2008 as the countrys political crisis reached fever pitch, according to the United Nations latest World Investment Report.

The report titled Transnational Corporations, Agricultural Production and Development and released by the UN Conference on Trade and Development (UNCTAD) showed FDI inflows into Zimbabwe plunging to US$52 million in 2008 from US$69 million the previous year.

The decline tracked developments on the countrys political and economic scene characterised by post-election violence and government meddling in business operations.

The 2008 FDI figure is way below the average FDI inflow into Zimbabwe between 1990 and 2000 of US$88 million.

The poor FDI score came against the backdrop of attempts by the former Zanu (PF)-dominated government to rail through parliament a controversial Economic Empowerment and Indigenisation Bill that would have forces foreign investors to cede 51 percent of their shareholding to blacks.

Sponsors of the law said the controversial legislation was meant to give control of the countrys natural resources to the majority blacks.

The legislation drew criticism from economic analysts and central bank governor Gideon Gono who feared it would scare away foreign investors at a time Harare desperately needed support from the international community.

Introduction of the indigenisation law was suspended following the formation of a unity government between Zanu (PF) and the former opposition Movement for Democratic Change.

Post published in: Economy

Leave a Reply

Your email address will not be published. Required fields are marked *