Zimbabwe ready to review policies to attract foreign investments

By Janet Shoko

Posted on Wednesday, 7 May 2014 14:39

“We are looking for mutually beneficial economic relationships not confrontation,” he told a democracy conference in Harare on Tuesday.

We are too small a country to pursue a policy of confrontation

“We are too small a country to pursue a policy of confrontation.”

Zimbabwe’s economy has suffered from years of international isolation blamed on President Robert Mugabe’s confrontational politics.

The 90 year old leader accuses the West of working with his rivals to topple him from power.

After a disputed election in 2002, he pulled Zimbabwe out of the Commonwealth.

The country has also been under sanctions imposed by the European Union, Canada, Australia, New Zealand and the United States because of Mugabe’s human rights record.

However, Chinamasa said Zimbabwe “was open for foreign direct investment from all countries” and that the business partnerships the country forges must be done without preconditions.

This is a sharp departure from the controversial legislation enacted in 2010 that requires foreign businesses operating in the country to cede at least 51 percent of the shareholding to black Zimbabweans.

Critics have blamed the government’s indigenisation policy, among others, for stalling foreign investment inflows.

Meanwhile, a Chinese embassy official in Harare Han Bing said the Asian giant was willing to extend loans to Zimbabwe and would use its minerals as collateral.

Beijing has extended nearly $1,5 billion in the last three years in loans to Zimbabwe.

“We are discussing whether we can take proceeds of sales for some minerals as collateral for the loans,” Han said.

“We are asking for collateral because it’s in accordance with rules and regulations when granting any loan, but it don’t mean that we will use the collateral.

“This is the concept that we are now discussing with the Zimbabwe government.”

According to Han, China does not oppose the country’s indigenisation laws but urged government to have a consistent policy environment, citing a ban on the exports of raw chrome as an intervention that spooked investors.

“What is really harming the investor is the inconsistency in policy. When investors enter the market they make their decisions based on the existing policy,” he said.

“I didn’t see any companies close because of the indigenisation policy but I have seen companies close because of the change in policy.”

Last year, Zimbabwe earned $1, 97 billion from mineral exports, making about 64 percent of foreign currency earnings.

But this week the World Bank revised downwards the 2014 economic growth projections for Zimbabwe from 4, 2 percent to three percent.

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