Fix investment laws, EU tells Zim

via Fix investment laws, EU tells Zim – DailyNews Live 6 November 2014 by Ndakaziva Majaka

HARARE – Zimbabwe must fix and clarify its legal framework around investment laws, the new EU ambassador to the country Phillipe van Damme said.

This comes as the bloc is set to advance Zimbabwe $300 million in funding support after it lifted decade-long trade restrictions imposed on the southern African country — criticised for disregarding property rights and violation of bilateral investment promotion and protection agreements (Bippas).

Apart from negative perception hounding the country as an investment destination, van Damme said Zimbabwe’s legal framework was a more pressing problem.

“Beyond perceptions, we have other concerns, real concerns in the form of the legal framework, which has to be clarified and… should create a more conducive environment for private investment,” he said.

“We never stopped economic engagement… Zimbabwe has had complete access to free markets, but of course you had an environment which created maybe some perceptions which hampered economic development,” he said.

In the recent past, Zimbabwe has experienced a significant slump in foreign direct investment.

Besides political instability at some point, investors were wary of the country’s indigenisation law, which compels foreigners to cede majority shareholding to black Zimbabweans.

Van Damme said re-engagement steps taken by EU and Zimbabwe signified “a joint willingness to normalise relations”.

“The steps are an important signal for the private sector, knowing of course that beyond perception a lot still needs to be done,” the EU ambassador said.

Zimbabwe requires approximately $27 billion, more than double the size of its economy, to fund an ambitious five-year economic plan, ZimAsset — targeted at improving basic services, food security and infrastructure rehabilitation.

While officials feel this move was a major step towards the normalisation of frosty relations, Information minister Jonathan Moyo told the EU ambassador that relations will only become normal after the bloc removes “restrictive measures” imposed on the First Family, according to a ministry source.

In another development, which analysts said brought confidence in the country, a British business delegation visited Zimbabwe last week for the first time in nearly 20 years.

The business delegation was looking for ways the British companies could help the cash-strapped government in Harare raise money to fund its economic programmes.

Britain’s new ambassador to Harare, Catriona Laing, said the business group, made up primarily of consultancy firms, wanted reassurances about the safety of investments and information about the black economic empowerment law that requires foreign-owned firms to sell majority stakes to locals.

“This visit is very important because it will hopefully lead to the private sector coming back and pursuing the opportunities they have identified,” Laing said.

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