Govt ‘contradictions’ damaging Zim investment future

A leading economic analyst in Zimbabwe has warned that the government’s contradictory statements on politics, the economy and other issues are seriously damaging the country’s investment future.

Saviour Kasukuwere
Saviour Kasukuwere

These contradictions were clear this week when, at the same time that Empowerment Minister Saviour Kasukuwere was threatening the takeover of a top South African investment in Zimbabwe, Prime Minister Morgan Tsvangirai and Finance Minister Tendai Biti were attempting to woo more investment from the South Africans.

Kasukuwere has threatened mining giant Implats with "enforcement mechanisms" unless it transfers a significant portion of its shareholding of its Zimbabwe based Zimplats and Mimosa firms. Kasukuwere this week also lashed out at Implats CEO David Brown, accusing him of ‘delaying tactics’ for not adhering to Zimbabwe’s indigenisation laws that require a share handover of up to 51%.

At the same time, in an effort to attract foreign investment to Zimbabwe,

Prime Minister Tsvangirai led a ministerial delegation to South Africa this week for an investment conference. Tsvangirai told that conference that Zimbabwe was "open for business".

“We've had three years of inclusive government, this country is going through a transition and through this transition we have established the necessary environment. There is no better moment than now to lay the groundwork for inviting people to come. We attach great importance to foreign direct investment that's why we are saying come,” Tsvangirai said.

Analysts have warned that the fight with Implats, which is the largest South African investment in Zimbabwe, was damaging investor confidence, which has already been shaken by the general political crisis in the country. But on the dispute with Implats, Tsvangirai tried to allay fears.

"The issue is work in progress. No one in the indigenisation law says that you shall grab people's property or you shall nationalise. In fact you buy equity at value so it is a discussion that we are very clear about…however I want to underline the principle of local participation by Zimbabweans, it is what we will encourage and through dialogue I'm sure that major participation by locals will be arrived at but certainly there is no grabbing, there is no nationalisation," he said.

Finance Minister Tendai Biti, who also spoke at the conference, was less subtle, asking: “How do we make sure that in Zimbabwe the resources do in fact sweat for the Zimbabwean people which is not the case at the present moment. Shareholders in London, Joburg and Cape Town are primarily benefiting." said Biti.

Professor Tony Hawkins told SW Radio Africa on Friday that the ‘contradictions’ from government, especially about the indigenisation plan were due to “economic illiteracy.”

“The problem is that investors want certainty and all they get from this government are contradictions. People want to know the rules and if they don’t like them they won’t invest. But these contradictions just make the investor environment unstable,” Hawkins said.

Hawkins meanwhile said that ideally, the indigenisation scheme as it stands should be scrapped, calling it a “divisive” strategy that only empowers a minority. He said that with only one in 12 Zimbabweans currently in work the empowerment scheme, said to help working indigenous Zimbabweans, would only help a small portion of the public.

“What about the other 11? This is a not a program designed to help them,” Hawkins said.

Finance Minister Biti meanwhile has again acknowledged the missing millions from the Chiadzwa diamond fields, stating: “There is a gap between what is happening in (Chiadzwa) and what we are receiving and what we expect to receive. We have received US$174m in 2010 and we received US$80m in 2011. I have been very clear that we are expecting to receive US$600m in the year 2012 and this is in our budget.” SW Radio Africa

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  1. Wilbert Mukori
  2. Wilbert Mukori

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