ECONOMIC crisis-ridden Zimbabwe needs sound policies and a return to the rule of law if the country is to attract foreign direct investment (FDI), European Union ambassador Philippe Van Damme has said.
In an interview with the Zimbabwe Independent, Van Damme said potential investors are not interested in regime change, but attractive investment policies and respect of the rule of law.
“Attracting foreign direct investment from all over the world is a crucial factor in ensuring a prosperous future for Zimbabwe,” said Van Damme. “The predictability of the economic and financial environment, based on a legal framework that grants the respect of the principles of accountability, transparency and non-discrimination, is an essential condition to attract foreign investors.”
Van Damme’s call for the restoration of the rule of law, property rights and investor-friendly measures comes at a time the country has been experiencing company closures, massive job cuts and lack of critical foreign investment due to toxic policies, particularly the indigenisation laws, deemed opaque and inconsistent.
Investors have also been critical of government’s failure to protect property rights, with the state recently listing 23 white-owned farms for compulsory acquisition under the country’s controversial land reform programme blamed for decimating a once thriving agricultural sector. Business delegations from countries such as United States, China, Russia, France, Scandinavian countries, Australia, Britain and other EU states have recently urged government to cultivate a good investment climate to attract foreign investors.
Van Damme said the country’s laws should be clear on investment while also protecting those who wanted to establish various businesses in the country. He said the EU was recommitted to assisting Zimbabwe in its efforts to revive the economy.
“We have a programme to assist the government in its economic reform. One of the programmes will be channelled through Zimref (Zimbabwe Reconstruction Fund) which is managed by the World Bank,” he said. “We are also engaging on policy dialogue and encouraging the government to implement essential reforms such as those identified by the International Monetary Fund’s Staff-Monitored Programme (SMP), and even beyond that programme.”
An IMF mission is currently in the country to conduct the second review under the 15-month SMP, an informal agreement between government and IMF staff to monitor the implementation of its economic reforms.
Property rights issues, one of the major stumbling blocks to FDI, have been a problem since the Zimbabwean government embarked on a chaotic land reform programme in 2000, ostensibly to redress colonial imbalances, but widely considered a politically expedient manoeuvre.
Land invasions are still occurring, resulting in more questions being asked about government’s commitment to property rights and the rule of law.