By Tatenda Dewa | Harare Bureau |
Zimbabwe is in an economic mess because it has a bad reputation mostly relating to property rights, a respected insurance establishment, Old Mutual, has said.
Old Mutual is in joint investment with government in some areas, such as Zimpapers.
“The country has a bad reputation…and will need to seriously overturn this deficiency if it hopes to attract the sort of investment its neighbours have been able to attract,” said the insurance giant in its latest quarterly review.
It added: “In order for Zimbabwe to improve its economic fortunes, a number of excessive legislation governing business operations and red tape need to be simplified”.
The World bank has revealed that the country had failed to receive meaningful investment even from its vaunted “all-weather friend”, China.
Out of the $20 billion investment package for Sub-Saharan Africa, Zimbabwe got a paltry $500 million that translates to less than three percent.
This is in spite of claims by President Robert Mugabe that he in 2014 visited China and struck “mega deals” that would transform the economy.
Zimbabwe attracted negative attention internationally when it embarked on an unplanned and violent land redistribution programme that displaced some 6,000 commercial white farmers, according to recent statistics from the ministry of Finance and Economic Development.
Victims of the forced displacement are yet to receive compensation for their losses even though Finance and Economic Development minister, Patrick Chinamasa, has claimed that evaluations are underway.
The Zanu PF government has been accused of violating bilateral investment protection and promotion agreements (BIPPAs) and governments such as the Dutch and South Africa have in the past urged respect for the international contracts.
The government is battling under a perception crisis over the indigenisation law that compels most foreign owned companies to cede 51 percent shareholding to locals in investments valued at $500,000 and above.
Investors are concerned that there is no guarantee that their projects would be protected under such legislation.
Recently, China was ruffled by government’s decision to stop the operations of Anjin, a Chinese diamond miner reported to have links to Beijing’s army.
Anjin was among the numerous companies that were ordered out following allegations of gem looting between 2009 and 2015.
A new vehicle, the Zimbabwe Consolidated Diamond Mining Company (ZMDC), a merger, has been set up but it is yet to start operations in the sprawling Marange fields in Manicaland province.
Zimbabwe’s economy has been on a steep downslide since the 2013 general elections that Zanu PF won with a contested landslide.
Independent analysts say unemployment is now more than 90 percent amid a growing informal sector, company closures, a growing cash crisis and inability by government to fund key projects. Nehanda Radio