Re-engagement key for economic revival

HARARE - Very few individuals in President Robert Mugabe’s Zanu PF administration, such as Finance minister Patrick Chinamasa, are pushing the international re-engagement agenda but their efforts are going to waste due to lack of complementing economic reforms.

Over the past three years, Zimbabwe has seen an influx of business delegations from various European countries scouting for investment opportunities, but our ease of doing business environment remains challenging.

For instance, opening a business in Rwanda takes only two hours and there are no bureaucratic processes that one has to go through as opposed to Zimbabwe where it takes no less than 20 days for one to register and start a business.

What this effectively means is that investors are skirting Zimbabwe in preference of other African nations where corruption and red-tape is minimised, but have equally abundant natural resources and human capital base.

Foreign Direct Investment (FDI) figures into Zimbabwe, coupled with the controversial indigenisation policy — which forces foreign-owned firms to cede 51 percent shareholding to locals — proves that the country is lagging behind other regional countries.

Zimbabwe’s FDI figures trended from $52 million in 2008, $105 million in 2009, $400 million in 2012 and 2013 as well as $545 million in 2014.

Although the trend is not that ugly, what makes the figures strange is the comparison with our neighbouring states with Mozambique alone almost netting $5 billion in FDI in 2014.

So while there is need to boost our international engagement efforts to avoid a complete dismantling of the economy, the government needs to adopt policies to build international business confidence, support technocratic and entrepreneurial expertise at home as well as reaching out to a sizable and skilled Diaspora population, encourage good governance and reduce inequality.

Already the lifting of economic sanctions by the European Union and the subsequent adoption of Zimbabwe’s debt repayment strategy by the International Monetary Fund and the World Bank is an indication that the international community is ready to embrace the country and end its decade-long isolation.

However, it must be noted that Zimbabwe’s re-entry into the global system brings with it the challenge and opportunity of engaging potential investors in terms not of ideological divisions, but of competitive advantage.

If the country is to attract investment, it must demonstrate that it is a worthwhile business destination and partner in a global economy crowded with competitor nations.

This includes clarifying indigenisation provisions for business and silencing dissenting voices of failed politicians who are economically illiterate.

 

Comments (2)

"Think with your blood" the slogan adopted by the Ossewa Brandwag in S Africa during WWll, applies equally to Zanu and RGM. Even geniuses who think with their emotions become cretins. The economy ... printing money till they could print no more. Shredding the hand that fed it...These belligerent destroyers are not the people to fix what they destroyed.

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