SOUTH Africa’s state Industrial Development Corporation (IDC) is not considering any projects in neighbouring Zimbabwe, saying investors appeared scared off by the country’s polit
IDC chief economist Lumkile Mondi said on Wednesday the investment promotion agency had received proposals for countries across southern Africa – with Zimbabwe the only exception.
“We haven’t seen any opportunities coming from that country,” Mondi said. “It has to do with the political investment climate. People want to invest where things are likely to be smooth.”
Zimbabwe’s failure to make South Africa’s investment list comes as Pretoria promotes a policy of “quiet diplomacy” toward its neighbour, declining to put public pressure on President Robert Mugabe to resolve the economic and political crisis that has left his country in tatters.
Mugabe, in power since Independence from Britain in 1980, blames the crisis on domestic and foreign enemies opposed to his controversial policy of seizing white-owned farms for distribution to landless blacks.
Mondi denied a local newspaper report on Wednesday that the IDC – which has projects in some 21 African countries – had “banned” investment in Zimbabwe, but said there simply was not any investor interest in projects for the state investment company to promote.
“We haven’t banned any country. We look at projects as they come because the IDC’s role is to support the private sector,” Mondi said.
“There isn’t any flow (to Zimbabwe) based on investor perceptions…. most of the foreign direct investments have been going to countries that are either oil-rich or commodity-based, countries like Angola, Algeria, Nigeria,” he said.
Foreign investment in Zimbabwe has dropped in recent years as the country’s once vibrant economy struggles with shortages of food, fuel and foreign currency while annual inflation has soared to 455,6% – one of the highest rates in the world.
The country is also facing an unemployment rate of 70% because of firm closures.