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Analyst: Zimbabwe Revisions Not Enough to Attract Investors

   Peter Clottey 22 June 2010
   Zimbabwe's  President  Robert  Mugabe, left, and Prime Minister Morgan
   Tsvangirai, (File)

Photo: AP

   Zimbabwe  President  Robert  Mugabe  (l)  and  Prime  Minister  Morgan
   Tsvangirai (r)

   The  deputy  chairman of the National Constitutional Assembly in South
   Africaâs  capital,  Pretoria, told VOA Zimbabweâs 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  Zimbabweâs government has revised rules that require
   foreign firms to transfer majority control to local blacks.

   âItâs  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,â 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,   Zimbabweâs   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
   countryâs 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, Zimbabweâs 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.

   âThey 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,â
   Mkwananzi said.

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

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