allAfrica.com: Zimbabwe: 'A Hard Sell' (Page 1 of 1)

The Zimbabwe International Trade Fair (ZITF), which ended this past weekend, was once celebrated as a forum to showcase the vast investment opportunities in the then bread basket of the Southern African region. It was established almost five decades ago.

At its peak the ZITF, held annually in Zimbabwe's second largest city Bulawayo, attracted dozens of international exhibitors and brought together multi-sectoral business interests from mining to tourism.

However, since the onset of the country's political and economic crisis -- of which the latter is blamed by authorities on sanctions imposed by western powers -- the fair has been beset by exhibitor flight as investment opportunities in the country dwindle.

According to the ministry of industry and international trade this year's fair, with the theme "Made in Zimbabwe for Africa and the World", attracted only seven countries. A number of countries that had confirmed participation withdrew at the last minute.

International trade minister Obert Mpofu told the state media that the 49th edition of the fair was to be a success, despite many pointers to the contrary. These included fuel shortages, which posed a serious problem to the fair, as admitted by ZITF general manager Daniel Chigaru during a press briefing.

Days before the fair Mpofu threatened hoteliers, telling them not to increase their rates as this would affect the prospects of the fair if exhibitors failed to secure accommodation.

The Zimbabwean authorities control and monitor prices of every economic sector, claiming price increases are aimed at disrupting government efforts to resuscitate the economy.

Earlier there had been fears the once powerful regional show would be postponed after the Zimbabwe Election Commission (ZEC) failed to release the presidential poll results. President Robert Mugabe demanded a recount despite widespread belief that he had lost the poll to long time rival Morgan Tsvangirai of the Movement for Democratic Change (MDC).

Uncertainty hovered over the fair as both industry and commercial players awaited the results, seen as indicative of whether the political temperature is to be conducive for business.

"It is normal that elections are times of great uncertainty in countries in transition and where business interests have been under threat because of political decisions that seek to control the economy. Businesses are not likely to pour more into any projects," Tapiwa Gundani, an economics lecturer at the local National University of Science and Technology, told IPS.

Therefore, Zimbabwe after an election is "hardly the time to speculate", he said.

Mugabe is accused of disrupting business operations through controversial political decisions, farm invasions and also the enactment of the Indigenisation Act which seeks to give up to 51 percent shareholding in major foreign companies to locals.

While the Zimbabwe government says the act is part of moves to give control of the economy to locals, there are concerns the law will benefit politicians with ties to the ruling ZANU PF. The party has demanded a recount of House of Assembly seats after it lost its parliamentary majority to the MDC.

Earlier this month Mo Ibrahim, founder of Celtel, one of Africa's largest mobile phone companies, told the global leaders' investment debate at the World Investment Forum held in Accra, Ghana, that "good governance is a critical factor in securing investment and sustainable development".

The 84-year-old Mugabe is accused by western nations, the International Monetary Fund and the World Bank of bad governance that has seen the economy shrink to levels that the World Bank says have not been seen in a country not at war.

The World Bank's Doing Business Report 2008 says it is harder to do business in Zimbabwe than it is in war-torn Iraq. For a second year in a row, Mugabe addressed the fair amid speculation that regional leaders, who had been official guests and opened ZITF over the years, snubbed invitations to be the keynote speaker at the fair. This is said to be because of the international pressure on the embattled president which grew after the disputed March 29 elections.

Tanzania's President Jikaya Kikwete was the last foreign head of state to officially open the fair in 2006.

This year's fair once again failed to attract foreign exhibitors from the European Union and the United States. ZITF board chairperson Nhlanhla Masuku blamed this on what he termed "illegal sanctions" imposed by the west.

The Zimbabwean authorities blame Britain and the U.S. for imposing economic sanctions on the country as punishment for the "land reform" programme which began in 2000 and saw the expropriation of white-owned commercial farmland without compensation.

To make up for the loss of western exhibitors, the ZITF has moved its focus to the 19 members of the Common Market of East and Southern Africa (COMESA). But this plan has also failed, Kenya and Malawi being the only notable countries to take part.

The government's efforts to draw eastern investors -- also known as its "look east policy" - do also not appear to have helped this year's fair as only Indonesia had confirmed participation.

The fair "was going to be a very hard sell", Gundani said.

"The volume of business that Zimbabwe is likely to attract from COMESA, will never match what the country used to get from the EU and the U.S. We have already seen South African companies closing shop because of the harsh economic environment and stringent laws.

"Zimbabwe needs major policy shifts. Many were expecting a change of government (this election) as the only avenue to attract major investment. It's not difficult to see that the ZITF is no longer the regional showpiece where major business deals used to be struck."

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