Zim not friendly for investors

HARARE - The US Cato Institute recently described Zimbabwe as a country with “one of the world’s worst business environments,” saying our economy is like an athlete on steroids, propped up by artificial injections of loans and aid from China and the West.

With this shocking knowledge in mind, instead of bending over backwards to reverse the situation and attract investment, Zimbabwe seems more determined than ever to make our country even less desirable for investors.

What better way to destroy any investor confidence that’s still left, than to continue with the barrage of contradictory statements about indigenisation and foreign investment.

Last week the Economic Planning and Investment officer Promotion minister, Tapiwa Mashakada was reported on VOA to have told South African investors that their businesses in Zimbabwe would not be affected by Zimbabwe’s indigenisation regulations.

Minister Mashakada said the Zimbabwe government would honour bilateral agreements between our two countries thereby protecting South African citizens from having their investments acquired by the State.
 
Mashakada’s assurances could not have been made at a worse time, coming just a couple of days before the Sunday Mail reported on proposals by government to amend indigenisation legislation. Instead of paying what is described as full, fair value for 51 percent company shareholdings that are being compulsorily ceded to the State, the proposed amendment won’t allow any compensation to be paid after all.

The Sunday Mail quoted the White Paper outlining the changes as reading: “The motivation for this position arises out of the desire to ensure that the people of Zimbabwe benefit fully, and without cost whatsoever, from enterprises that exploit their God-given natural resources.”

Mashakada’s promise to exempt South African investors from indigenisation regulations also came in the same week as the news about the latest intention to seize the land of yet another very well known and respected company.

A government gazette declared the State’s intention to compulsorily acquire, without compensation, CFI’s one thousand hectare farm on which their Crest Breeders enterprise produces chickens.

CFI said the farm being targeted houses their layers’ facilities and employs 600 people.  

CFI estimate that with the combined total of employees and their dependents on the land to be acquired number in the region of 3 000 people.

The Zimbabwe Investment Authority said recently that only $33 million of Foreign Direct Investment had been made in the first quarter of 2013 compared to $136 million in the same period of 2012.

A dramatic drop of 76 percent in foreign investment can’t be good for Zimbabwe whichever way you look at it, indigenisation or not.

Willing investors look at the policies of Zimbabwe and then they look at those of Zambia, Malawi, Mozambique and even further afield to the DRC, passing us by each time.

Zimbabwe repeatedly loses out as investors head north, south, east and west to countries where their shareholdings are not going to be at risk of being indigenised or seized without compensation; it’s plain common sense.  

Speaking in London last week, the MDC’s minister of Finance was quoted as saying that the indigenisation programme was an “elitist transfer” of wealth which would not create any “new value.”

 Those are damning words coming from the man who almost overnight reduced multi-billion percent inflation to less than five percent and introduced a currency which put food back on our shelves.

Despite their best attempts to attract foreign investors and bring new business to Zimbabwe, the prime minister, Finance minister, Tourism minister and Investment Promotion minister are as good as firemen with full hosepipes being followed around by men with drums of petrol and burning matchsticks. - Cathy BuckleZim not friendly for investors

The US Cato Institute recently described Zimbabwe as a country with “one of the world’s worst business environments,” saying our economy is like an athlete on steroids, propped up by artificial injections of loans and aid from China and the West.

With this shocking knowledge in mind, instead of bending over backwards to reverse the situation and attract investment, Zimbabwe seems more determined than ever to make our country even less desirable for investors.

What better way to destroy any investor confidence that’s still left, than to continue with the barrage of contradictory statements about indigenisation and foreign investment.

Last week the Economic Planning and Investment officer Promotion minister, Tapiwa Mashakada was reported on VOA to have told South African investors that their businesses in Zimbabwe would not be affected by Zimbabwe’s indigenisation regulations.

Minister Mashakada said the Zimbabwe government would honour bilateral agreements between our two countries thereby protecting South African citizens from having their investments acquired by the State.
 
Mashakada’s assurances could not have been made at a worse time, coming just a couple of days before the Sunday Mail reported on proposals by government to amend indigenisation legislation. Instead of paying what is described as full, fair value for 51 percent company shareholdings that are being compulsorily ceded to the State, the proposed amendment won’t allow any compensation to be paid after all.

The Sunday Mail quoted the White Paper outlining the changes as reading: “The motivation for this position arises out of the desire to ensure that the people of Zimbabwe benefit fully, and without cost whatsoever, from enterprises that exploit their God-given natural resources.”

Mashakada’s promise to exempt South African investors from indigenisation regulations also came in the same week as the news about the latest intention to seize the land of yet another very well known and respected company.

A government gazette declared the State’s intention to compulsorily acquire, without compensation, CFI’s one thousand hectare farm on which their Crest Breeders enterprise produces chickens.

CFI said the farm being targeted houses their layers’ facilities and employs 600 people.  

CFI estimate that with the combined total of employees and their dependents on the land to be acquired number in the region of 3 000 people.

The Zimbabwe Investment Authority said recently that only $33 million of Foreign Direct Investment had been made in the first quarter of 2013 compared to $136 million in the same period of 2012.

A dramatic drop of 76 percent in foreign investment can’t be good for Zimbabwe whichever way you look at it, indigenisation or not.

Willing investors look at the policies of Zimbabwe and then they look at those of Zambia, Malawi, Mozambique and even further afield to the DRC, passing us by each time.

Zimbabwe repeatedly loses out as investors head north, south, east and west to countries where their shareholdings are not going to be at risk of being indigenised or seized without compensation; it’s plain common sense.  

Speaking in London last week, the MDC’s minister of Finance was quoted as saying that the indigenisation programme was an “elitist transfer” of wealth which would not create any “new value.”

 Those are damning words coming from the man who almost overnight reduced multi-billion percent inflation to less than five percent and introduced a currency which put food back on our shelves.

Despite their best attempts to attract foreign investors and bring new business to Zimbabwe, the prime minister, Finance minister, Tourism minister and Investment Promotion minister are as good as firemen with full hosepipes being followed around by men with drums of petrol and burning matchsticks. - Cathy Buckle

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