As Zimbabwe gears up for elections later this year, there is optimism following a successful referendum signing for a new constitution. The referendum, which limits future presidential candidates to two five-year terms in office and allows for their removal if they are found guilty of serious misconduct, violate the constitution or are physically or mentally incapacitated. At least two million people cast their vote in the referendum on March 16.
The agreement is seen as a signal for investors to return to the mineral-rich country, which has been struggling for years. During a conference held over two days in Boksburg, South Africa, a delegation of high ranking Zimbabwean officials gathered to sell their country to investors.
It was led by deputy prime minister and famed rocket scientist Arthur Mutambara and the minister of economic planning and investment promotion, Tapiwa Mashakada. The aim was to lure investors and allay fears of the often violent confiscation of farms.
It is going to be a tough job for them as the country has no currency of its own. The use of the Zimbabwean dollar as an official currency was abandoned in 2009 as the Reserve Bank legalized the use of foreign currencies for transactions.
“Zimbabwe is open for business. The country offers serious investment opportunities in mining, manufacturing, tourism, construction, agriculture and consumer-facing industries such as ICT. In addition, attractive fiscal incentives are available to registered and licensed investors,” says Mashakada.
The Zimbabwean constitution has been a thorn in the side hampering growth and foreign investment in the past. Mutambara says that one of the problems they have had over the past 10 years has been the issue of the constitution. He says that most agreed that the problems were coming from a flawed and dysfunctional constitution.
“For the past 10 or so years there has been a movement to develop a new constitution. What we have done with this referendum is that now we have a new constitution adopted by the people of Zimbabwe. It might not be the best or the most desired constitution; it was a compromised document. Three major parties had to compromise but it is better than the old constitution. The positive thing is to say that now Zimbabwe has a new constitution, which the majority of people endorsed, that’s progress… We need to make sure the taxation is supportive of investors. The referendum and constitution are a starting point in the journey of the creation of an attractive business climate,” says Mutambara.
When questioned about the past, which saw farmers and investors driven away, Mutambara is confident that it won’t happen again. He says that the indigenization law, which says foreign companies must sell 51% of their stake to a Zimbabwean national, is not about expropriation or nationalization.
“We want to empower our people, we want our people to be involved in their economy but when we say we want 51%, the Zimbabwean player must pay fair value for those shares. That way we have a partnership that brings stability for the investor and for the Zimbabwean economy,” says Mutambara.
Gabriel Shumba, a human rights lawyer and political commentator from Zimbabwe, is skeptical.
“It is still premature to be talking about investors returning to the country as much as talking about exiled Zimbabweans returning home. Zimbabwe still has to adhere to electoral regulations and we need to see the results of the elections not being contested before investors can come,” he says.
In the fight for investors, the Zimbabwean people have support from the South African government. South Africa’s deputy minister of trade and industry, Elizabeth Thabethe, told delegates at the conference that Zimbabwe could feed the entire African continent.
“We have agreed with our partners, including Zimbabwe, that we must do more collaborative work in developing institutions, including access to finance. In 2010, the country only managed to attract about $105 million out of over $2 billion proposals submitted. They are however showing interest in moving forward,” she says.
Gauteng Department of Economic Development MEC Nkosiphendule Kolisile agreed that South Africa should encourage investors.
“They must think employment, job creation. If your neighbors are having instability in their economy, you don’t go around rejoicing because that will have a direct impact on your economy,” he says.
The question is whether investors will heed the call. It is clear that if Zimbabwe sneezes, Africa catches a cold.

Tag: Economic Development

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