Zim, risky investment destination: Australia

HARARE - Australia says investing in Zimbabwe is extremely risky, likening the move to swimming in the dangerous crocodile-infested Zambezi River.

Matthew Neuhaus, the country’s ambassador to Zimbabwe, on Monday told a Sapes Trust conference that the southern African nation has a long way to go in attracting Foreign Direct Investment (FDI).

“Investing in Zimbabwe is like swimming in the Zambezi between crocodiles and hippos,” he said, adding that “instead of policies to encourage FDI, you have chosen indigenisation, especially in the mining sector.”

He said Australian investors have found it easier to do business in Zambia and Mozambique, injecting billions of dollars in investment in their economies.

“Because of the uncertain political and economic environment, investors have skirted this country,” said Neuhaus.

“Certainly, indigenisation laws have been confusing, and the implication of the 51 percent ownership does not inspire confidence in investors. They want to know that their investments are safe and that they get what they put in,” he said.

He said government needs to boost confidence and attract investments, further stating that Zimbabwe’s harsh business environment and corruption were some of the factors that continue to scare investors away from the country.

This comes as in March, British deputy ambassador to Zimbabwe Chris Brown said investors remained worried about the perceived lack of respect for property rights and uncertain business climate in the country.

“If the government doesn’t  soon articulate a really clear approach on achieving empowerment and respect property rights, Africa, I fear, will continue to rise without Zimbabwe,” he said.

Brown said Zimbabwe had potential to attract more investment than most African countries but remained hamstrung by unfriendly policies and environment.

A recent report by Singapore-based Global Business Reports also ranked

Zimbabwe among the riskiest mining investment destinations despite its vast mineral wealth.

“However, certain points stood in its favour. These included last year’s ‘peaceful’ elections, and the undeniable mineral potential of the country,” read part of the report.

Zimbabwe holds an estimated 30 percent of the world’s diamond reserves as well as the second-largest known platinum deposits in the world after South Africa.

However, over the years the country has experienced a pronounced investor flight due to bad economic policies such as the land reform exercise and the indigenisation policy.

Although the southern African country has been labelled a high risk investment destination due to its political risk profile, authorities have been trying hard to prove to the world that Zimbabwe is changing for the better.

While officially opening the annual trade fair in Bulawayo last month, President Robert Mugabe assured investors that his government’s aggressive empowerment policies were not ill-intentioned.

Instead, the leader said Zimbabwe’s indigenisation policy had been misinterpreted.

“As originally set out, it (indigenisation) is meant to empower and integrate the majority of our people into the mainstream economy. The policy aims at achieving inclusive growth, sustainable development and social equity,” he said.

Comments (8)

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water - 7 May 2014

Ex Rhodies are in Australia as we all know, the statement does not have any impact because of the source. It is one of their dreams for us to slide further into more economic problems, the country will be susceptible to more damage if we give space to such statements in our media. Our journalism must be constructive for the good of the nation. The enthusiasm of recovery is lost through exposing our people to such counterproductive statements, give people hope, incentivise.

tichaona - 7 May 2014

You can say it again, Tichaona. I, too, have always wondered what purpose this kind of reporting serves other than a scotched earth policy in aid of utterly confused opposition politics. Look around Zimbabwe's neighbours, we are the only ones who cannot agree to disagree then move on as a united nation. The enemy will always exploit differences, but if we are united, even in our differences, we will prosper. Our politics seem to thrive on negativity as the passport to the throne, shame!

Disgusted - 7 May 2014

Tichaona and Disgusted you are lacking objective evaluation here. Ask your self how much FDI have been poured into Mozambique, Zambia and Tanzania since 2007 and compared it with Zimbabwe. Facts and figures indicate that we are actually growing negatively as evidenced by retrenchments and company closures while our neighbouring states are increasing. ZANU PF policies are just like drunken man's appetite-" He complains that the food is horrible - then immediately cries saying the portions are too small".

lee moyo - 7 May 2014

Tichaona & Disgusted in present day Zimbabwe it's ZPF way or no way, we all know that. So much for the comment on being united when still harping on about Rhodies 34 years after independence! Bottom line is the crazy policies & incompetence which are the real root of our problems. Let's not even talk about the widespread corruption that stares the authorities in the face & nothing concrete is done about it.

saundy - 7 May 2014

@Tichaona and disgusted, you seem to lack EC 101 - Principles of Economics. You need to realize that Foreign Direct Investment is a key component of any economic wellbeing. I guess you guys know that Zimbabwe has got land (just like any other nation) of the four factors of production needed for people to survive. The land (natural resources) require FDI for it to be unlocked for any economic use because we do not have the capital to unlock the value for ourselves, hence we badly need FDI. Varume, stop listening to the ZANU PF nonsensical rhetoric of 'Zimbabwe igoridhe' 'heee Zimbabwe ine uchi nemukaka', chokwadi ndechekuti nyika ino haina kana chinhu, which is why you see even Ministers are engaged in small businesses like owning shops, combis and stealing residential stands as in the cases of Munangagwa, Chombo and Mai Mugabe, to mention but a few. Please use your eyes to see and potai muchibudawo mumboona nyika dzavamwe musanyanye kunyeperwa ne ZANU PF.

fortune - 8 May 2014

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