Mugabe an investors’ bogeyman

via Mugabe an investors’ bogeyman – The Zimbabwe Independent September 4, 2015

PRESIDENT Robert Mugabe this week proved to all and sundry he is Zimbabwe’s main stumbling block to foreign investment — an investors’ bogeyman — when he met Africa’s richest man, Nigerian billionaire tycoon Aliko Dangote, to clear the way for him to pour possibly billions into the country.

Editor’s Memo by Dumisani Muleya

Ordinarily, Mugabe’s meeting with Dangote, which triggered optimistic waves in the markets, should be hailed as a positive development, but a closer look shows that it is actually a bad approach. It proved an individual looms large over the system and runs government like his farm.

Besides and more importantly, it confirmed Mugabe is in fact the main obstacle which must be removed for serious capital to flow into the economy. Although there are many other problems which frustrate investors from coming to Zimbabwe like sovereign, economic and political risk as well as a poor credit rating, policy inconsistency and a hostile business climate, Mugabe is the wild card. He is unpredictable and unprogressive; only principled in his fossilised ideological rigidity.

By meeting Dangote to give him the go-ahead to invest in cement production, coal mining and thermal power generation, Mugabe showed he has the final say on who should invest or should not. If he had wanted, he could have blocked Dangote. In other words, things depend on his whims and caprices.

Therein lies the rub — why does a country’s investment prospects and development have to depend on an individual? This is as undesirable as it is self-centered. Investors don’t need to depend on Mugabe’s approval. They should be guided by the laws, rules and policies of the country. Mugabe can’t be a law unto himself.

That is why it is important to have clear policies, regulations and guidelines that investors must follow. Of course, policies must also be coherent and rational. Irrational policies like indigenisation — which is racketeering by regulation — are damaging.

Relying on an individual, no matter how powerful, to vet investors and give them permission to come in or not is not only entrenching personal rule, but also inviting rent-seeking and corrupt activities. In fact, it’s consolidating kleptocracy.

That is why Mugabe’s meeting with Dangote for him to get the go-ahead to invest and assurances his investments would be safe is such a bad thing. Even the route Dangote was forced to use — first sending emissaries to Vice-President Emmerson Mnangagwa and such other dodgy brokerages behind the scenes — is not good for the investor and the country. It may be good for “access brokers” who get “facilitation fees” and politicians who demand something for granting access to their offices, but not the country.

We have heard of top political leaders’ names being used to seek bribes or for extortion by their shady minions who believe that granting access to them is a form of business on its own when it is clear abuse of office and corruption.

This week’s events during Dangote’s otherwise important visit make Zimbabwe look like a banana republic, a failed state or indeed a personal property which somebody runs as and how he wishes.

What is needed to attract investors is not Mugabe’s fancies and impulses, but predictable policies and procedures. It is the rule of law and property rights which are imperative. In other words, investors need a hospitable business environment, not presidential assent to come to Zimbabwe. Investors also want incentives and security, not backwardness, to bring in their capital.

Over the past few years, Zimbabwe has experienced many economic ups and downs. To investors who haven’t been closely watching the market landscape, the rollercoaster may appear scary.

However, some investors are still optimistic like Dangote showed. Yet many are scared away by Mugabe’s toxic politics, policies and the bureaucratic labyrinth they have to navigate before investing.

COMMENTS

WORDPRESS: 7
  • comment-avatar

    dangote should have a little chat with mzee khumalo of south africa about running a big business in zimbabwe. khumalo owns metallon gold, which in turn owns 5 of the biggest gold mines in zimbabwe.
    metallon gold has been through a torrid time at the hands of the zanu pf government; khumalo will have the details for dangote.

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    Long ago I had to go to Malawi on business. It was exactly the same with Banda, only he could make any decision, all the rest were too scared. And no one person can ever run a whole government.

    The bad news is that Banda lived to 102, many years after he was effectively brain dead. like Mugabe

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    beeater 6 years ago

    Ask Mugabe why he would host Dangote and not Strive whose investment is benefiting Zimbabwe already?

    Sounds funny and fake love. By the way, what did Bob say about Nigerians last time?

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    Chidumbu 6 years ago

    a fool and his money is soon parted, wonder how much Mugarbage is paying him to say he will invest. What sane person would invest in something that is so broken. Dangote better check he still has a watch after shaking hands with these thieves

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    Ian Smith 6 years ago

    Only an Indigenous black skinned knuckle head has the qualification to meet the investment requirements (The law of stupid arrogant neanderthals) Result zero investment simple No????

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    This Nigerian did not get rich by being stupid! He is way, way smarter than The Bhobho (and is probably just playing with him). I think the Nigerian crooks are much smarter than the Zim crooks, who are really just dimwitted thugs

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    Ian smith 6 years ago

    Well said KWV, “set a thief to catch a thief” It is a thieves fest and a spectacle in beggars paradise.