Economists warn Mugabe

via Economists warn Mugabe – DailyNews Live by Ndakaziva Majaka

Mugabe’s threat to seize the assets of British companies operating in Zimbabwe is likely to deal a fatal blow to the country’s economy, economists warned yesterday.

Condemning comments by the 89-year-old president, economists described Mugabe’s threat to nationalise foreign-owned firms as “dangerous posturing”, which would only discourage foreign investors Zimbabwe desperately needs.

Threats to take punitive measures against British firms if Western powers refuse to lift sanctions will suffocate foreign direct investment (FDI) and damage the economy, analysts warned yesterday.

Mugabe told mourners at the burial of former National Railways of Zimbabwe boss Mike Karakadzai at the National Heroes Acre on Sunday that “enough and enough of passive attitude towards the West”.

“There are so many British companies operating in this country, we haven’t done anything to put any sanctions on them, but soon we will hit back at them,” warned the re-elected Zanu PF leader who is starting a seventh five-year term.

“Time will come when we shall say tit-for-tat, you hit me and I hit you as well. You impose this on me and I will also impose that on you,” Mugabe added.

Analysts said this cannot help Zimbabwe create jobs, wealth and opportunities. Zimbabwe is currently suffering from a crippling economic meltdown and these threats, if carried out, would risk bankrupting the country.

While efforts to get comment from Deborah Bronnert, the British Ambassador to Zimbabwe late yesterday were futile, embassy officials however are keeping their criticism muted.

“We don’t want to make a bad situation worse,” said one diplomat.

Last week, Britain said Mugabe’s re-election could not be deemed credible without an independent investigation into allegations of voting irregularities.

British foreign secretary William Hague said: “I am extremely concerned that the MDC had to withdraw its legal challenge due to concerns over the independence of the Judiciary.

“I strongly believe that an independent investigation of any allegations of election irregularities would be required for the election result to be deemed credible.”

As Mugabe threatened to hit back against sanctions, economists joined a chorus of condemnation of his threats.

Analysts said “the utterances are not sustainable and not in anyone’s interests.”

“These threats will not serve anyone’s interests. It is their governments that have imposed sanctions on Zimbabwe not the firms,” independent economist John Robertson told the Daily News, adding that “these firms have been behaving well and victimising them will only stifle FDI.”

Zimbabwe is currently struggling to attract meaningful FDI due to several factors, particularly political uncertainty and the indigenisation policy — compelling foreign firms to cede 51 percent shareholding to black locals.

The country’s FDI marginally increased last year to $400 million from $387 million in 2011 according to statistics from the United Nations Conference on Trade and Development.

Robertson said Mugabe’s threats “only painted an unattractive picture to investors who already have adopted a wait-and-see attitude towards Zimbabwe.”

Takura Mugaga, another economic analyst said “the battle between foreign companies and the president is becoming more of a personal than national battle.”

“The president’s tit-for-tat attitude might actually be evidence of how much he could have lost through asset freezing after sanctions were implemented.

“Obviously the economy won’t benefit, I think he is aware that he has to have a trade-off between growing the economy and losing his hold on power and to him it’s obvious the convenient option is to throw the fight into the ring,” Mugaga said.

Economists said Mugabe’s comment, especially about the economy, are extraordinary for a president with 33 years’ experience.

“They are a real blow to our chances of attracting foreign investment.”

Mugabe’s particular target appeared to be dozens of British companies and some of them in the mining sector.

Even though South African investment was growing, Britain remained of “critical importance to Zimbabwe’s economy”.

The British have played a dynamic role in the economy of Zimbabwe, with Rio Tinto subsidiaries, Dunlop, and Chloride chemicals as some of the major players.

Other British companies operating in Zimbabwe include banking groups Standard Chartered Plc and Barclays Plc.

The financial institutions are already under pressure to comply with the controversial empowerment policy.

Mugabe’s comments drew disbelief from the mining industry, which generates 30 percent of export earnings, making it second only to agriculture as a foreign currency earner.

A mining consultant in Harare said: “If he treats the mining industry in the same way as he has the land, it would be the end.”

Mugabe and members of his inner circle are subject to financial and travel sanctions imposed by the United States and European Union.

The sanctions were imposed by Washington and Brussels over alleged electoral fraud and human rights abuses, among other concerns.

Mugaga said: “Obviously these utterances are potentially fatal. It goes without saying that these threats are going to suffocate FDI.”

 

COMMENTS

WORDPRESS: 12
  • comment-avatar
    Guvnor 7 years ago

    Zimbabwe will never progress or record economic growth until the stubborn and rebellious blind mouse robert and the zanu muppets are relieved of power.

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    Jongwe 7 years ago

    Mugabe is well aware of the damage his rubbish policies are causing to the country because they are really meant to do just that. His actions are not random events, but they are well planned actions and are a ploy to execute his final solution of completely handing over the country to his Chinese masters. Even if the west were to ease the so called sanctions against him, he will still find an excuse and get rid of the British and American commercial interests so that his friends the Chinese can take over and complete the colonization of this country.

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    Mugabe is a wet fowl he has no clue of what his doing

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    savezimbabwe 7 years ago

    Zimbabwe needs the West more than the West needs Zimbabwe. So old man pliz stop all this cheap talk and start running the country…
    since you won in a (free and fair) election. Up to now all you are doing is attacking Tsvangirai and the West instead of getting on with your duty.

  • comment-avatar
    jongwe power 7 years ago

    Why wait 34 years to get revenge on Britain, America, etc.? If this campaign were for real, it should have begun in 1980 as a transitional move, rather than a last-minute, spur-of-the-moment panic grab that will surely send us back to the good old days of 2007.

  • comment-avatar
    Zvichapera 7 years ago

    Zanu PF will not be able to rig the Economy, let’s see what next they will do. It will be very a interesting 5 years with the very same 61% who will suffer. Do not be fooled Zanu PF has never put anything on anyone’s table except those that serve the interests of party only.

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    Greyhora 7 years ago

    Soon Mugabe will die, even mai Mujuru said so. And he wants the country to die with him!

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    Gavan Duffy 7 years ago

    Sanctions applied by the USA UK and EU who do they think will suffer – not Mugabe nor any others who have access to the wealth of the country and it was John Robertson who chaired the last sanctions meeting when British Labour Government was in power who voted to continue with sanctions and regrettable it is the ordinary people in the country that suffer and Mugabe and all the white farmers are still waiting for the funds to buy out the white farmers as agreed to in 1980 that would be under Margaret Thatcher who appointed Lord Carrington – where is that money – I do not support Mugabe but one can see why he gets frustrated with the British Government.

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    Gavan Duffy 7 years ago

    Zimbabwe is a praying and Christian country, we dare to ask why the LORD would allow Mugabe to get back into power yet again. Having been fortunate enough to read the report addressed to Vice President Mujuru in 2007 from Exchange Control at RBZ we wonder why Gono financed a shelf company owned by a prominent MDC-T MP with millions of US dollars the report is one of treachery and high treason one has to read it to see how politics works in Zimbabwe and no wonder MDC-T lost the plot. you have to read it to understand it she certainly did not show it to Mugabe though.

  • comment-avatar

    Dude don’t bother ur advice will fall on deaf advice…better try advising a farmer ther n Mwenezi…

  • comment-avatar
    Chasura 7 years ago

    kana sekuru ava vachiti havade help from other countries, ngvarapwe itsvo dzavo kuParirenyatwa tione vakapabuda.vana vavo vanoenderei out of zim for educaation if the country can stand on its own.Bona akapedza chikoro tione akasevenzera muno as well if the industry is flourishing.kurwara uko.makura sekuru.West this West that, ko maAmerican amakapa mari kuti a negotiate for sanctions removal makamapirei kana West yakaipa.Do holidays in your conry if its fit to survive on its own.use your currency tione.

  • comment-avatar

    Too old brains display shameful thinking. We are tired of such hetoric nd bullish outbursts. Time for a new Zimbabwe is around the corner.