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Analyst: Zimbabwe Revisions Not Enough to Attract Investors

  • Peter Clottey

The deputy chairman of the National Constitutional Assembly in South Africa’s capital, Pretoria, told VOA Zimbabwe’s coalition government needs to do more in order to attract direct foreign investment.

George Mkwananzi, however, said that it was invigorating to hear an official saying Zimbabwe’s government has revised rules that require foreign firms to transfer majority control to local blacks.

“It’s quite refreshing to see that common sense is beginning to reign in the minds of the ZANU-PF people. Now, I think it will somehow encourage those that have wanted to go back to Zimbabwe and invest their money. It is possible that this new strategy could be calculated to encourage investors to come. But, they have not really discarded the intention of changing that policy,” he said.

This comes after a top official of the unity government announced that Zimbabwe will Friday publish a detailed version of the amended regulations on how foreign firms should achieve majority control by locals.

In 2008, Zimbabwe’s ZANU-PF dominated parliament enacted an empowerment law that requires foreign owned businesses to hand over 51 percent control to blacks.

The law was reportedly aimed at benefiting indigenous Zimbabweans defined as those who suffered under colonial-era racial discrimination and their children born after independence in 1980, excluding the country’s 20,000 whites.

Described by observers as controversial, many warned the law would scare away potential investors and further plunge the country into deep economic crisis.

But, local media quoted Savior Kasukuwere, Zimbabwe’s Indigenization and Economic Empowerment minister as saying the government is willing to work with investors.

Analysts say, despite the revised rules, the move is unlikely to encourage foreigners to invest in Zimbabwe.

Mkwananzi said investors will think twice before investing in Zimbabwe.

“They can introduce that policy once the companies have invested their money and the companies will suffer in the same way as (white) farm owners suffered when they lost control and ownership of their farms,” Mkwananzi said.

He also said that there is need for both President Robert Mugabe and Prime Minister Morgan Tsvangirai’s unity government to come up with policies that will encourage foreign investors in order to help revive the country’s stuttering economy.

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