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Political Risk Deters International Investors From Taking Zimbabwean Stakes


Investors attending a two-day conference in Harare on investing in the country following the installation of a national unity government after long instability expressed skepticism about the government's ability to provide an environment conducive to doing business.

Not only is there legislation on the books that says Zimbabweans may demand a 51% stake in strategic sectors, but there is considerable uncertainty as to how long the current unity government will last and whether the transition to a new government will be orderly.

Under a so-called Global Political Agreement signed in September 2008, President Robert Mugabe and his long-ruling ZANU-PF party share power with the former opposition party of Prime Minister Morgan Tsvangirai. Two MDC formations - the other is led by Deputy Prime Minister Arthur Mutambara - hold a majority in the House of Assembly.

Correspondent Thomas Chiripasi of VOA's Studio 7 for Zimbabwe reported from Harare.

Political analyst Glen Mpani of the Center for the Study of Violence and Reconciliation in Cape Town, South Africa, said Harare must do more to draw foreign direct investment.

Zimbabwe Stock Exchange chief executive officer Emmanuel Munyukwi confirmed global investors remain worried about political risk despite their interest in taking a stake in the country, telling reporter Patience Rusere it is up to the politicians to boost confidence.

Organizers of the Mine Entra mining conference coming up later this month said just three foreign firms have registered – two of them from neighboring South Africa – compared with 37 in 2008, blaming legislating mandating local control for the drop in participation.

The Indigenization Act signed into law by President Robert Mugabe in early 2008 in advance of elections says Zimbabweans must hold a 51% stake in mines in particular.

Africa Resources Limited Chairman Mutumwa Mawere told VOA reporter Chris Gande that the unity government has failed to chart a clear course to reassure foreign investors.

More reports from VOA's Studio 7 for Zimbabwe...

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