Danish investors keep a keen eye on Zim

Danish Head of Mission to Zimbabwe, Eric Brogger Rasmussen, told The Zimbabwean that the political situation had created skepticism among potential investors from Denmark who were wary about the security of their investments.

He said factional fights within Zanu (PF) and new threats to seize farms owned by white farmers were deterrents to foreign investment. “Wrangling in the ruling party sends signals that there is a lot of uncertainty, and investors do not want to invest where there is uncertainty,” he said.

“On the issue of the farms, I do not know whether it’s a planned move but it sends strong negative signals to the world. Memories are still there about what happened in the past and I think any attempt to take farms will remind people of what happened years ago and that would be a further deterrent to possible investors,” said Rasmussen.

Analysts say infighting within Zanu (PF) has come with heavy costs for the economy as the fight for political power has taken precedence over the pressing need to revive the country’s ailing economy.

Rasmussen said the internal strife was sending the wrong signals to foreign investors.

Danish investors were still watching Zimbabwe with a keen interest, he said. He implored the government to create a conducive environment for investors in the light of the competition from other neighbouring countries.

“That’s the challenge for the country and the government. They are in competition with other countries so they have to make sure that Zimbabwe is an attractive destination for foreign investments,” said Rasmussen, adding that Zimbabwe was performing poorly compared to neighbouring countries such as Zambia because “investors find it too risky or cumbersome or a combination of both”.

Other factors that have been blamed for scaring away potential investors include the Indigenisation Act which compels foreign firms to cede majority shareholding to locals. “Investors study laws, regulations and they also check the procedures involved and to a large extent, that has not changed here. There has been a lot of talk with the government sending signals that they would want to review economic laws but nothing has really changed,” said Rasmussen.