Uncertainty scares off UK investors
BULAWAYO – Uncertainty over Zimbabwe’s future political path and ongoing seizures of privately-owned commercial farms continue to scare off British companies from investing in the southern African country, according to United Kingdom (UK) ambassador Mark Canning.
Zimbabwe is desperate for foreign investment to help revive an economy ravaged by a decade-long decline and political crisis.
“A number of British companies have been in Zimbabwe recently, they have been encouraged by what they see in terms of economic stabilisation. But they are not ready to invest yet as they are concerned by ongoing land invasions and what that tells you about the security of tenure, issues of governance and the legal framework,” Canning told ZimOline this week.
British firms have historically been dominant players in Zimbabwe’s economy and there are still dozens of British-owned companies operating in the UK’s former colony despite threats by President Robert Mugabe in the past to seize the businesses to retaliate against what he calls London’s continued interference in the country’s domestic affairs.
Some of the top British companies include London-listed resource groups Rio Tinto and Anglo American and financial institutions Standard Chartered and Barclays Bank.
Harare’s nine-month-old coalition government between Mugabe, Prime Minister Morgan Tsvangirai and deputy Premier Arthur Mutambara has brought a degree of stability to Zimbabwe’s political situation but the future remains uncertain.
Incessant squabbling between Mugabe and Tsvangirai has left political analysts wondering about the coalition’s long-term viability while most potential investors appear to have adopted a wait and see attitude before they can consider making any significant investments in the country.
On the other hand supporters of Mugabe have continued invading the few remaining white-owned commercial farms, exposing the unity government’s inability to enforce the rule of law.
The decade-long farm invasions, which Mugabe says were necessary to ensure blacks also had access to arable land that they were denied by previous white-led governments, have also seen several farms owned by foreigners and protected under bilateral trade agreements (BIPAs) between Zimbabwe and other countries seized without compensation.
The seizure of private land has raised questions about Zimbabwe’s commitment to uphold property rights as well as agreements entered with other countries.
Germany recently protested to Harare an invasion by an army brigadier of a white-owned farm in which a German national had made a substantial investment under BIPA.
Canning who was in the Matabeleland South provincial capital – Gwanda – to commission a US$40 000 library whose construction was funded by the British embassy, said Zimbabwe’s former colonial power will this year spend US$100 million to boost the country’s health sector.
“We will be spending around US$100 million in Zimbabwe this year for large scale projects in health, to support primary education and investing in water sanitation systems to make it difficult for cholera to return . . . as all this suggests, we believe the new inclusive government presents a real opportunity to move this country forward,” said Canning. – ZimOnline