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Sunday, March 9, 2014
- While investors need assurances about property rights and the protection of investments before they will invest in Zimbabwe’s precarious economy, the state of democracy in the Southern African country should also be a consideration. These were some of the opinions of businesspeople and diplomats participating in a recent summit on Zimbabwe’s future.
Human rights violations and land grabbing shattered Zimbabwe’s democracy and economy during the past decade as a result of President Robert Mugabe and his ZANU-PF party’s rejection of democratic process.
Amidst extra-legal killings, detentions, torture and mass displacement of people, the Zimbabwean dollar crashed, shop shelves emptied and the country registered one of the world’s worst peacetime inflation rates.
A power-sharing deal between ZANU-PF and the Movement for Democratic Change (MDC) restored relative political stability and led to the dollarisation of the economy. The country has since exhibited some signs of recovery, both democratically and economically.
Prime minister and MDC leader Morgan Tsvangirai sought to assure investors in highly emotive language at the summit that his country had turned a corner.
“The Economist” news editor Adam Roberts argued that signs of renewed interest in the country could be noticed but that it remained unclear whether the recovery could be sustained.
“For the first time in a long while you have investors seriously considering if this is the moment to invest in Zimbabwe and you have Zimbabweans in the diaspora contemplating if this is the time to return,” Roberts said.
“But many serious tests are yet to be passed, and the diaspora, investors, donors and others need a great deal more assurances,” he added.
Johannesburg-based Zimbabwean businessperson Chris Goromonzi told IPS that, “it is time Zimbabwe creates opportunities and conditions for companies to do business. This involves conducive legislation that protects investment.”
German ambassador to Zimbabwe Albrecht Conze acknowledged that progress was being registered but said change was “millimetre-ing” forward and that real progress was possible only once a new constitution that guaranteed private property was agreed.
White commercial farmers’ representatives warned that legal disputes and claims for substantial compensation for expropriated land could not be wished away.
“The most important thing is to address issues of property rights and rights of the individual. The fact that farmers who lost their land have not been compensated should serve as a warning to would-be investors,” John Worsley-Worswick from the Justice for Agriculture farmers’ lobby group told IPS.
Concern was also raised over government plans for “indigenisation” — transferring majority ownership of companies to black Zimbabweans — which are seen in some quarters as an attempt by Mugabe to expropriate businesses for his allies.
Tsvangirai said that the indigenisation measures are being amended to take investors’ concerns into account.
Zimbabwean minister of economic planning and investment promotion Tapiwa Mashakada said that the government was working at reducing red tape that made it difficult to do business and to put in place the necessary legislation to protect investments.
“We are working on an investment protection bill so that we can lay down the guarantees for and obligations of investors,” Mashakada told IPS.
But Zimbabwean businessperson Tawanda Nyambirai told IPS that foreign investors should use their businesses to help democratise Zimbabwe. “The consideration should be human rights, whether political, social or economic,” said Nyambirai.
“They have to ask themselves whether they are investing in Robert Mugabe or in Zimbabwe. Investment should be a strategy that encourages democratisation,” said Nyambirai.