HARARE - Government’s move to stop the acquisition of farms covered under Bilateral Investment Promotion and Protection Agreement (Bippa) although long overdue is most welcome.

This comes after 40 farmers successfully sued government for $25 million at the International Court for Settlement of Investment disputes and more are also pursuing the legal route.

Damage has already been done and measures need to be taken in terms of redressing displaced farmers.

Zimbabwe has been unable to access lines of credit from traditional creditors like World Bank and International Monetary Fund and is also struggling to get foreign direct investment (FDI) because of inconsistent policies.

Indigenisation and property rights issues are at the centre of controversy as investors are seeking clarification and are sceptical that there is no guarantee of protection on investment.

The Indigenisation and Economic Empowerment Act, undermines the effectiveness of the investment and trade agreements. This has seen the country failing to unlock returns from Bippas signed with several regional and international countries.

Economic Planning and Investment Promotion minister Tapiwa Mashakada has often decried the lack of positive outcomes from Bippas signed with a number of countries.

Citing the example of the Bippa with Botswana, Mashakada said the country was yet to benefit in terms of new capital investment.

Ratification of the agreement was expected to result in local business accessing over $70 million in lines of credit from that country but to date nothing has come out of it.

The minister also said although the Zimbabwe Investment Authority approved $6,6 billion worth of new investment projects last year, some of these potential investors were doing so on a speculative basis.
Despite improvements in respect of obtaining stability in the business environment, Zimbabwe is losing significant FDI to other countries in the region.

According to the United Nations Conference and Trade (Unctad) World Investment Report 2011, Zimbabwe recorded FDI of $105 million in 2010, compared to the $9 billion which went to Angola during the same period.

Government needs to harmonise investment and indigenisation laws to ensure the objectives of such policies are congruent.

The country needs realistic and constructive modification of Indigenisation and Economic Empowerment legislation and cessation of confrontational, provocative public statements relating to that legislation.

Once political stability is obtained through credible, free and fair elections the better for interested investors to come on the back of investment security and certainty. - Staff Writer