British GOVT says corruption limiting investment opportunities in Zimbabwe

By Nyashadzashe Ndoro | Nehanda Business |

The United Kingdom has noted that investment opportunities are still limited in Zimbabwe due to the failure of the government to address underlying structural challenges that include prohibitive and volatile foreign exchange controls, high inflation, fragile property rights, and pervasive corruption.

In a statement seen by Nehanda Radio, the UK’s Foreign, Commonwealth and Development Office said President Emmerson Mnangagwa’s failure to resolve the above issues was limiting the much needed investment opportunities in the Southern African country.

“Zimbabwe faces continued cycles of economic and humanitarian challenges. A bumper harvest and a post-COVID recovery will bring improvements, but longer-term prospects, and indeed investment opportunities, remain contingent on addressing deep underlying structural challenges.

“These challenges include prohibitive and volatile foreign exchange controls, high inflation, fragile property rights, and pervasive corruption,” read the statement.

The UK government also noted that “currency reforms have been slow, and whilst businesses are currently able to pay overseas suppliers and repatriate profits through the foreign currency auction, this process is slow and unreliable. Exchange rate management by the Reserve Bank continues to leave a large gap between the official and parallel market rates, increasing the risk of arbitrage.”

It added that the legacy of the Fast Track Land Reform programme of the 2000s which was led by late former President Robert Mugabe was the “inability to use agricultural land as collateral, stymying investment in the agricultural sector”.

The UK government however,  noted that the relaxation of indigenisation requirements, and fledgling attempts to compensate dispossessed farmers by Mnangagwa’s administration was a promising step, “but occasional and localised instances of land invasions continue to damage the credibility of property rights in Zimbabwe. As a result, Zimbabwe’s global competitiveness has been declining since 2015 and is below the sub-Saharan African average. Zimbabwe ranks 124th (out of 137) in the Global Competitiveness Index (GCI).”

The former colonial power added: “Electricity shortages are common, although this situation has improved since the frequent outages of 2019. Increased rainfall has helped the country’s primary hydroelectric station return close to full capacity, whilst structural reforms to the state utility have reduced its debt burden.” Nehanda Radio