By John Kachembere
HARARE – Former Prime Minister Morgan Tsvangirai says government’s policy inconsistencies were hampering Zimbabwe’s prospects of economic turnaround as it remains an albatross in attracting foreign direct investment.
Tsvangirai said the policy uncertainty and inconsistencies on key programmes such indigenisation and economic empowerment were not helping matters in bringing sanity and predictability, the two key factors for economic stability.
“There is an acute lack of investor confidence and support by development partners, driven by the legitimacy crisis, as well as a ballooning debt which remains unserviced,” he said.
“Without legitimacy, the country remains exposed to risk and uncertainty, two factors that determine investment and economic progress,” added Tsvangirai.
This comes as Zimbabwe continues to wobble in attracting foreign direct investment, drawing in a mere $410 million against $56 billion that went into African economies last year, according to a United Nations research report.
The southern African country’s economy — predicted by the World Bank to grow by only two percent this year against government’s 6,1 percent forecast — urgently requires significant amounts of foreign direct investment to create employment, enhance technological progress, improve productivity, add value and beneficiate its raw materials.
Tsvangirai noted that the Zanu PF-led government has run out of ideas, even in the wake of shrinking revenue collections as a result of a diminishing base.
“Our grim economic plight as a people would have been surmountable had there been a credible election last year, even if it had meant a genuine and fair loss by the MDC-T. The business sector has been crippled and shackled by a biting liquidity crunch, creating a gridlock that has negatively affected commerce and the services sector,” he said.
Market experts say Zimbabwe — which is still emerging from a decade of economic decline and hyperinflation and a stuttering economy in the aftermath of a disputed election in July last year that extended President Robert Mugabe’s 33-year rule — must create a stable environment for investment.
Economist Godfrey Kanyenze said resolving the contradictions arising from the indigenisation law would result in increased foreign direct investment.
Kanyenze noted that the proposed amendments to the indigenisation law must be “inclusive and results in policy consistency and predictability, then it removes the suspicion and uncertainty associated with a discretionary framework,” he said.
“Given the past experiences where government ministries and agencies contradicted each other, inclusivity will help send a clear and unified signal which enhances confidence to would-be investors,” added Kanyenze.
Thedias Kasaira, Imara’s managing director, recently said “most investors want to see it (amendments to the indigenisation law) in black and white rather than just talks”.
“Our position is that as long as there is no clarity on the law people will continue to doubt,” he said, adding that “but we believe there is nothing really wrong with it as long as it is applied to all in the same way.” Daily News
