SW Radio Africa (London)

26 April 2013

Zimbabwe: Zanu-PF Indigenisation Drive Blamed for Investment 'Free Fall'

Zimbabwe looks set to retain its third place position on the list of the world's poorest countries, amid a foreign investment 'free fall'.

This free fall has been indicated by figures supplied by the Zimbabwe Investment Authority, which show a 76% drop in Foreign Direct Investment (FDI) this year as compared to the same period in 2012. The figures show that only US$33 million in FDI has been recorded so far this year, whereas during this period last year over US$130 million was recorded.

Economist Eric Bloch said in an opinion piece that this "horrendous decline in foreign investor interest in Zimbabwe as an investment destination should send a very loud message to government, and especially so, as much of Africa is attaining very considerable FDI growth."

"Tragically, however, that message is falling on deaf ears, for there are none so deaf as those who will not hear. That Zimbabwe is not attracting considerable FDI, in contrast to the substantial extent of such investment in various other countries in Africa, is not because it does not have numerous, and diverse, positive resources which provide opportunity for investment," Bloch wrote.

Independent Economic analyst John Robertson told SW Radio Africa that last year's FDI figures were very low and have continued to fall, because of the ZANU PF-led indigenisation campaign.

The campaign has targeted foreign owned companies in Zimbabwe and requires them to cede 51% of their shareholding to Zimbabweans. The Empowerment Ministry is said to now be taking this campaign one step further by proposing amendments to the national indigenisation regulations to make it legal for the government to take the shares without due compensation.

Robertson said Friday that it is this aggressive and damaging policy that has left Zimbabwe without much hope of attracting new investment.

"We have attracted very little new investment since the announcement of our indigenisation policy. So I think that is the principle reason why investors have become very disinterested in bringing new investment capital to the country," Robertson said.

The FDI figures paint a gloomy picture for a country that desperately needs investment to repair years of damage wrought by ZANU PF policies. The country is facing up to 90% unemployment while more than 70% of the country reportedly lives in poverty. It is also the third poorest country in the world according to the International Monetary Fund World Economic Outlook Database.

Robertson said the status quo will not change until there is a political change.

"The answer is political... .ZANU PF started its electioneering campaign some years back with the statement that under no circumstances should economic recovery be permitted if it is credited to the MDC," he said.

He added: "I think ZANU PF chose the indigenisation policies on purpose, to reduce the prospect of economic recovery taking place before the next election. Because the only polices that could guarantee economic gains, have been policies of the MDC party."

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