via ZANU PF government stifling investment efforts | SW Radio Africa by Mthulisi Mathuthu on Thursday, May 8, 2014
Despite assurances by Finance Minister Patrick Chinamasa that Zimbabwe is open for business, a growing number of strategic people still see the ZANU PF government as resisting efforts to bring investment into the country.
Developments suggest that the government’s unyielding stance is frustrating both its allies and Western envoys alike.
Australian Ambassador Matthew Neuhaus this week accused the government of frustrating Western diplomats’ efforts to facilitate investment in Zimbabwe. Neuhaus told a conference in Harare that as long as the government did not engage the donor community positively, Zimbabwe’s economy would continue to suffer. He said because of the government’s policies, investing in the country was like ‘swimming in a crocodile infested Kariba Dam’.
Many speakers at the conference, who included former finance ministers Tendai Biti and Simba Makoni, implored the government to seize the moment and adopt policies that attract investment. Chinamasa appeared to signal a climb down on the indigenous and empowerment policies by assuring foreign investors that their investments would be safe, despite the law which requires them to cede 51% of their businesses to local players.
However observers say as long the law is not changed Zimbabwe will find it difficult to attract investment.
Economic analyst Masimba Kuchera said Chinamasa’s gesture will remain meaningless unless it is complemented by the amendments to the law itself. He added: ‘The law needs to seriously be improved if not scrapped. I think it is not realistic to apply the 51 percent shareholding condition to all types of businesses, especially in businesses where there is need for technology transfer and a lot of capital. Zimbabwe is in serious need of foreign resources and to get that we must open up and level the playing field.’
The extent of global concern over the controversial law was revealed two weeks ago when former South African President Thabo Mbeki engaged President Mugabe on the issue. Reports said Mbeki, who is one of Mugabe’s closest allies, was in Harare to warn Mugabe on the dangers of the much criticized indigenisation laws for the country’s economy.
Observers say Zimbabwe’s isolation was further highlighted again in the revelation that the Chinese Prime minister Li Keqiang’s Africa trip will not take him to Zimbabwe. Reports said the Chinese Premier will visit Angola, Ethiopia, Kenya and Nigeria. Last year, Li Keqiang’s boss and China’s leader Xi Jinping, also omitted Zimbabwe from his itinerary.
Observers said this suggests that while Zimbabwe sees China as its trusted friend Beijing was in fact not as committed to the partnership.
In a move seen as a way to spite the West, Mugabe’s government has cut numerous deals with the Chinese across all sectors of the economy. However, despite the ZANU PF government’s hostility to the West, it continues to donate towards many development projects in the country. The health sector is solely dependent on the donors with 98% of drugs in the country provided by Western donors.