NewsSouthern AfricaZimbawe: Mugabe on investment charm offensive

Fri,17Nov2017

Posted on Wednesday, 30 March 2016 11:34

Zimbawe: Mugabe on investment charm offensive

By Janet Shoko

Zimbabwe's President Robert Mugabe. Photo©ReutersZimbabwe's President Robert Mugabe on Tuesday pleaded with Japanese companies to invest in his mineral rich country, but he is unlikely to have many takers, as foreign companies have been ordered to either comply with local empowerment laws by April 1 or close shop.

While Mugabe was on his charm offensive in Asia, saying Japanese firms can take advantage of special economic zones in Zimbabwe, his Empowerment minister insisted there was no going back on the indigenisation policy, a law that many fear scares away foreign investors.

The proposed cabinet directive to close companies as a punitive measure is tantamount to condemning Zimbabwe

"Zimbabwe's doors are open to Japanese investors and they should look forward to a mutually rewarding relationship with us," Mugabe told the media in Tokyo on Tuesday.

But back at home, a pall has enveloped foreign businesses, as the Empowerment minister, Patrick Zhuwao, who happens to be Mugabe's nephew, insisted that companies that fail to cede 51 per cent to locals will be forced to shut down on April 1.

On March 22, Mugabe's ministers unanimously adopted a resolution directing all ministries to proceed with revoking licences of foreign companies that fall afoul of the local empowerment laws, causing panic and drawing condemnation from the business sector.

Business lobby group, Buy Zimbabwe chairperson, Oswell Binha said the government is decimating the private sector.

"The proposed cabinet directive to close companies as a punitive measure is tantamount to condemning Zimbabwe into continued economic decline and adjective poverty," he said.

Confederation of Zimbabwe Industries (CZI) president, Busisa Moyo told the privately owned The Standard newspaper that the directive has created a flurry of questions and "anxiety" from investors with projects in the country.

"It's worse for those investors who are still at planning stages to set up factories and new plants in Zimbabwe," he said.

"Those investors still contemplating investing in southern Africa are likely to strike off Zimbabwe from the list and go to our neighbours."

While business was sceptical of the April 1 deadline, the National Indigenisation and Economic Empowerment Board says there has been a spike in the number of foreign firms asking how they could comply with the empowerment laws.

"The March 31 deadline is looming and there has been an upsurge of enquiries from companies seeking to comply ahead of the deadline," the board's chief executive, Wilson Gwatiringa said.

Foreign owned companies operating in Zimbabwe are required by law to ensure that at least 51 per cent of their shares are held by indigenous Zimbabweans or State owned entities.

"The message we should send investors is that Zimbabwe believes in the rule of law," Zhuwao said in defence of the empowerment laws.

"Companies that operate illegally must stop operating. This is not policy inconsistency."

Zimbabwe has tried to lure foreign investment and improved its rankings on the ease of doing business survey, but the empowerment laws continue to cause consternation among investors.



Subscriptions Digital EditionSubscriptions PrintEdition

FRONTLINE

NEWS

POLITICS

HEALTH

SPORTS

BUSINESS

SOCIETY

TECHNOLOGY

COLUMNISTS

Music & Film

SOAPBOX

Newsletters

Keep up to date with the latest from our network :

subscribe2

Connect with us