Bippas won't stop assets seizure: Chinamasa

HARARE - Bilateral Investment Promotion and Protection Agreements (Bippas) do not prevent government from compulsory acquisition of assets from investors, Finance minister Patrick Chinamasa said.

The Treasury chief told Parliament last week that government would only have to compensate the investor.

“Under the Bippas, government is not prevented from compulsory acquisition of assets. It is required to pay compensation,” Chinamasa said.

His remarks come as lack of respect for property rights — coupled with mistrust — is one of the major factors deterring foreign direct investment into Zimbabwe.

A Bippa is an agreement establishing the terms and conditions for private investment by nationals and companies of one state operating in the territory of another state.

It further provides for unrestricted transfer of returns from investments and defines procedures for the resolution of disputes, should they arise.

Therefore, Bippas offer companies and individuals from investor countries increased security and certainty under both domestic and procedures for the resolution of disputes should these arise.

However, Zimbabwe is notorious for violation of property rights, despite having signed several Bippas.

In 2000, government embarked on the Land Reform Programme and some farmers who were protected under Bippas lost their farms.

In response to concerns over the violation of Bippas in the implementation of the land reform programme, Chinamasa said there was nothing amiss.

“Under those Bippas, which you allegedly say were violated, the only shortcoming was that we failed to raise the money to pay compensation, but there was no violation,” he said.

Chinamasa also spoke about the Bippa between Zimbabwe and Kuwait, which was ratified by Parliament.

“The essence behind operationalising the Bippa with Kuwait is to enhance Kuwait investor confidence in Zimbabwe as a safe and viable investment location as well as from the Multi-lateral organisations against expropriation and nationalisation and providing procedures for compensation should these occur,” the former Justice minister said.

He said Bippas are meant to encourage companies and individuals to invest in the country.

This comes as the Britain’s deputy ambassador to Zimbabwe Chris Brown recently said British investors are interested in venturing into Zimbabwe but remain worried about the perceived lack of respect for property rights and uncertain business climate.

He said the country should enforce investor friendly policies, including reviewing its indigenisation policy.

“Zimbabwe should look directly at the elephant in the room, the continued uncertainty over the implementation of the Indigenisation and Economic Empowerment,” Brown told a Zimbabwe National Chamber of Commerce (ZNCC) conference.

He added: “If government does not soon articulate a clear approach, one that achieves empowerment yet respects property rights, Africa will continue to rise without Zimbabwe.”

“Zimbabwe should therefore follow an investor-friendly path and this alone would give a seven percent GDP growth per year. This is ignoring her abundant agricultural resources and exceptionally-educated labour force,” Brown said.

He said investors will continue shunning the country if their concerns about the business climate are not addressed.


Comments (8)

These guys are confused and their policies are confused. Who will bring their money and invest in such? As Strive said the quality investor will simply stay away...all you will get are the Billies of this world who will suck you dry and move on to fresh meat.

Galore 123 - 3 June 2014

ZANU PF can never revive the economy they destroyed. No NIKUV will ever help them to rebuild the tattered economy. But of course come 2018 ZANU PF may win again by hook&crook while the country continues to suffer.

BVONDORAI - 3 June 2014

The whole purpose in investing is so that you can make a profit and grow your business not to have your business grabbed and then being compensated. What kind of assurance is that from a whole minister of finance, what is the purpose of singing the BIPPAS in the first place if the agreement can be torn to shreds at any time? The painful truth as the deputy ambassador says is that Africa will continue on the growth path without us. Others are moving forward while we are back to somewhere around 1953 standard of living and infrastructural levels.

Dr Know - 3 June 2014

Talk of the baboon shooting himself in the foot! If the government has enough money to pay compensation why would they need to seize the assets first? kune udofo kozoti hudofo hwasangana nougororo

galante1 - 4 June 2014

WTF is wrong with this Chinamasa guy. We are all praying for economic revival and he's doing the opposite. God have mercy!!!

Tozvireva - 4 June 2014

The Honourable Minister has no clue about business and economics. I strongly think he should recuse himself from the post. The failure to honour agreements is at the root of capital flight and the economic decay that we are experiencing. Comrade Minister please show us how the tearing of agreements entered into in good faith will help in our objective to create 2.2 million jobs before the next general election? Must we rig the 2018 elections as well?

Zum 1990 - 4 June 2014


wamaromo - 5 June 2014

This is a system failure. I am certain Chinamasa does not even believe what he says but has no choice, its pay back time....He is doing what he has been instructed to do and say even if its nonsensical.

Mudha - 10 June 2014

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