Mugabe warned

HARARE - President Robert Mugabe’s threat to seize the assets of British companies operating in Zimbabwe is likely to deal a fatal blow to the country’s economy, economists warned yesterday.

Condemning comments by the 89-year-old president, economists described Mugabe’s threat to nationalise foreign-owned firms as “dangerous posturing”, which would only discourage foreign investors Zimbabwe desperately needs.

Threats to take punitive measures against British firms if Western powers refuse to lift sanctions will suffocate foreign direct investment (FDI) and damage the economy, analysts warned yesterday.

Mugabe told mourners at the burial of former National Railways of Zimbabwe boss Mike Karakadzai at the National Heroes Acre on Sunday that “enough and enough of passive attitude towards the West”.

“There are so many British companies operating in this country, we haven’t done anything to put any sanctions on them, but soon we will hit back at them,” warned the re-elected Zanu PF leader who is starting a seventh five-year term.

“Time will come when we shall say tit-for-tat, you hit me and I hit you as well. You impose this on me and I will also impose that on you,” Mugabe added.

Analysts said this cannot help Zimbabwe create jobs, wealth and opportunities. Zimbabwe is currently suffering from a crippling economic meltdown and these threats, if carried out, would risk bankrupting the country.

While efforts to get comment from Deborah Bronnert, the British Ambassador to Zimbabwe late yesterday were futile, embassy officials however are keeping their criticism muted.

“We don’t want to make a bad situation worse,” said one diplomat.

Last week, Britain said Mugabe’s re-election could not be deemed credible without an independent investigation into allegations of voting irregularities.

British foreign secretary William Hague said: “I am extremely concerned that the MDC had to withdraw its legal challenge due to concerns over the independence of the Judiciary.

“I strongly believe that an independent investigation of any allegations of election irregularities would be required for the election result to be deemed credible.”

As Mugabe threatened to hit back against sanctions, economists joined a chorus of condemnation of his threats.

Analysts said “the utterances are not sustainable and not in anyone’s interests.”

“These threats will not serve anyone’s interests. It is their governments that have imposed sanctions on Zimbabwe not the firms,” independent economist John Robertson told the Daily News, adding that “these firms have been behaving well and victimising them will only stifle FDI.”

Zimbabwe is currently struggling to attract meaningful FDI due to several factors, particularly political uncertainty and the indigenisation policy — compelling foreign firms to cede 51 percent shareholding to black locals.

The country’s FDI marginally increased last year to $400 million from $387 million in 2011 according to statistics from the United Nations Conference on Trade and Development.

Robertson said Mugabe’s threats “only painted an unattractive picture to investors who already have adopted a wait-and-see attitude towards Zimbabwe.”

Takura Mugaga, another economic analyst said “the battle between foreign companies and the president is becoming more of a personal than national battle.”

“The president’s tit-for-tat attitude might actually be evidence of how much he could have lost through asset freezing after sanctions were implemented.

“Obviously the economy won’t benefit, I think he is aware that he has to have a trade-off between growing the economy and losing his hold on power and to him it’s obvious the convenient option is to throw the fight into the ring,” Mugaga said.

Economists said Mugabe’s comment, especially about the economy, are extraordinary for a president with 33 years’ experience.

“They are a real blow to our chances of attracting foreign investment.”

Mugabe’s particular target appeared to be dozens of British companies and some of them in the mining sector.

Even though South African investment was growing, Britain remained of “critical importance to Zimbabwe’s economy”.

The British have played a dynamic role in the economy of Zimbabwe, with Rio Tinto subsidiaries, Dunlop, and Chloride chemicals as some of the major players.

Other British companies operating in Zimbabwe include banking groups Standard Chartered Plc and Barclays Plc.

The financial institutions are already under pressure to comply with the controversial empowerment policy.

Mugabe’s comments drew disbelief from the mining industry, which generates 30 percent of export earnings, making it second only to agriculture as a foreign currency earner.

A mining consultant in Harare said: “If he treats the mining industry in the same way as he has the land, it would be the end.”

Mugabe and members of his inner circle are subject to financial and travel sanctions imposed by the United States and European Union.

The sanctions were imposed by Washington and Brussels over alleged electoral fraud and human rights abuses, among other concerns.

Mugaga said: “Obviously these utterances are potentially fatal. It goes without saying that these threats are going to suffocate FDI.”

Comments (8)

Zimbabweans are a crazy lot.From 2000 things have been done hap hazard without anyone showing the will to counter Mugabe's moves. It will take a thousand years to stop zanupf, because of the passive nature. It is for this reason sadc thinks Zimbabweans accept anything without question. How on earth can economists give Mugabe advice on the backdrop of a fraudulent election. This is tantamount to trying to save zanupf. A total collapse will be good for the country.

mukorekore - 27 August 2013

I have seen kids forgo and forget even their names after winning fish-fish, arauru, pada, draft and rounders. Mugabe and company should never behave as if Zimbabwe is an island. We have made mistake in the past and should take accountability for it; in the 1980s we could get away with so many things, and we should not continue to pull what is left from under the feet of this generation...it will end up with so much anger against those who appear and behave like headless chickens

nemburungwe - 27 August 2013

Haiwawo, uku ndikokunonzwi kutaura zvinhu zvisina maturo. In English they say its 'hot air' or we can say what Matibili is saying is a 'sonorous nothing'. Matibili ari kuda kurova shumba nembama.

Tipeiwo Danda - 27 August 2013

There are three unfortunate things that to Zimbabwe: 1.Robert Gabriel Mugabe; 2.ZANU PF; and 3.Grace Mugabe. 1. Robert Gabriel Mugabe Has caused many deaths for Zimbabweans. During the liberation struggle, he would send ill-trained or ill-equipped guerillas to fight the Smith Regime. Thousands of our beloved brothers and sisters perished because of that. Secondly, the guerillas relied on civilians for their welfare (food, clothing, medication etc) resulting in Smith's army killing thousands of civilians in the process. Zanla or Zipra can never claim to have won the war; the war ended through a negotiated process (Lancaster) which, in my opinion, they could have done in the beginning without committing anybody to war. In any war, there are no winners, just dead bodies. Because Mugabe is so stubborn, he committed people with the dire consequences. Post independence (after 1980); so many atrocites were committed including the infamous Gukurahundi and Murambatsvina where, again, civilians were the casualities. Now he is committing Zimbabwe to an economic criss.

Emmerson D Mnangagwa - 28 August 2013

God forbid, the same boring message that was a pain in Zimeye has migrated to Daily news. Oh vakomana. Vada tiregerewo.

Mavara Azarevhu - 28 August 2013

If they take any British company, I urge the west to put full sanctions on Zim, and that would mean real sanctions. money sold for diamonds in china will be difficult to move. no more spares for the mines. full sanctions to govt and all companies incl dzavatora dzacho! ndipo paanoona kuti haana kungwara Bob. Cancer iri kumujaidza sterek! anoda kusiya atiuraira nyika chete apa!

Grudge - 29 August 2013

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