Commercial Farmers' Union of Zimbabwe

Commercial Farmers' Union of Zimbabwe

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Barriers to investment on the increase

Barriers to investment on the increase

December 7, 2012 in Opinion

For too many years Zimbabwe has raised one barrier to foreign direct 
investment (FDI) after another.

Column by Eric Bloch

There is an abysmal and contemptuous disregard for the irrefutable fact that 
the country desperately needs such investment in order to attain substantive 
growth of its economy. That growth is critical if a comprehensive reduction 
of the overwhelming unemployment that has plagued Zimbabwe for too long is 
to materialise.

A virile economy is essential to alleviate the immense poverty and suffering 
that has not only afflicted an overwhelming majority of Zimbabweans, but has 
also significantly contributed to the decline in the key infrastructure 
required by the populace and the economy.

Facilities that have deteriorated include most parastatals, national health 
and education, and many other utilities.

Our economy needs a solvent, stable and effective fiscus.

Zimbabwe has sizeable resources which are a magnetic attraction to FDI, 
including a vast array of minerals much sought after internationally, 
ranging from gold and platinum, to tantalite, lithium, chrome, diamonds, 
methane gas, and much else. Its soils and climate enable it to produce 
various agricultural commodities in national and international demand.

Zimbabwe has diverse tourism attractions. Its geographic location puts it at 
an advantage to be a supplier of primary and secondary industrial products 
to an extensive portion of southern and central Africa, which has a 
potential customer base of more than 420 million people.

This is over and above an ability to export to further afield.

Complementing these, and many other potential economic resources, Zimbabwe 
has a population which, with a few exceptions, is very able and 
work-motivated (notwithstanding the considerable extent of Zimbabwe’s “brain 
drain” to the diaspora in recent years).

With all these and many other economic assets, Zimbabwe could have been one 
of the foremost economies in Africa, had it been a recipient of the 
considerable FDI essential for the development and exploitation of the 
economic opportunities.

It would also have accessed internationally-developed, state-of-the-art 

However, with ever-increasing determination, Zimbabwe has not only refrained 
from accommodating the reasonable expectations of foreign investors, but 
has increasingly created one barrier after another, or deterrents to 

Any investor, be they foreign or domestic, save for a few exceptionally 
high-risk takers, requires that investment be into an environment that has, 
at the very least, a stable economy, and preferably one which is attaining 
real growth.

In addition, he or she expects assured investment security, political 
stability, absolute respect for property rights, and an environment which 
has an assured, high level of law and order.

Over and above these essential characteristics, investors inevitably have an 
expectation that the operations of the enterprise into which investment is 
made would not be endangered, or their returns unduly minimised by 
peremptory, overly-authoritarian bureaucracy and state interference, or by 
unduly excessive taxation or other imposts.

Tragically, not only does Zimbabwe consistently disregard these investor 
needs, and has steadfastly failed to ensure fulfilment of essential 
requirements for a conducive investment environment, but it recurrently 
pursues new and additional policies which worsen that environment, resulting 
in an endlessly ongoing decline in new investments very desperately required 
to restore well-being of the Zimbabwean populace.

As if the unilateral expropriation of lands, (effected without 
compensation), the recurrent incidents of violence in order to displace 
farmers from accessing their lands (without any State interventions to 
contain that violence), did not suffice to alienate investor interest, 
government has continuously enabled or condoned many other occurrences which 
negate investor interest in Zimbabwe.

This includes the contemptuous disregard for the many Bilateral Investment 
Promotion and Protection Agreements, and the introduction of oppressive, 
ill-considered, counter-productive laws for the indigenisation of business.

The country has failed to administer its resources constructively, in 
consequence of which it has allowed the majority of its parastatals to 
decline to such a great extent that virtually none of the utilities and 
services essential for a vibrant economy are available.

These include a grievous inadequacy of electricity supplies, a near-derelict 
national airline, grossly insufficient rail services, as well as innumerable 
other economically-essential needs.

It blatantly and has brazenly allowed and enabled endless, fiscally and 
economically disabling corruption to prevail in both the public and private 
sectors. It belittles and threatens the banking sector in general and 
foreign-owned banks in particular, thereby continuously diminishing public 
confidence in the banking sector, with inevitably consequential adverse 
effects upon the economy.

It also unceasingly alienates international goodwill and strives to deflect 
recognition of its economic misconduct by attributing all negatives to 
allegedly “illegal international sanctions” which, in reality, are only 
restrictions and constraints upon the government and its underlying 
entities, and upon many of those who constitute the government.

As if all these and many other acts of commission and omission do not 
suffice to be very major deterrents to the extensive investment needed to 
resuscitate and develop the economy, endless pursuits that discourage 
investments are pursued.

Most recent is the declared intent that the Zimbabwean security forces are 
to become actively involved in monitoring and enforcing government’s 
oppressive, non-constructive, indigenisation programme, to ensuren that 
indigenous Zimbabweans have the mandatory 51% equity in companies.

Recent reports record that an entity of senior military, police and 
intelligence service officers is to be mandated to monitor private sector 
compliance with the indigenisation policies, legislation and regulations.

The functions of the security forces are to ensure the defence of Zimbabwe 
and its people against any enemy actions; and to assure nationwide 
compliance with the human rights-centred constitution and the like, but not 
to engage in, or interfere with, economic and business policies.

Zimbabwe cannot benefit from security forces interfering in the day-to-day 
conduct of commerce and industry, and doing so yet further dissuades 
investors from pursuing investment opportunities in the country.


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