FOREIGN investment in Zimbabwe for the year will remain subdued owing to President Robert Mugabe’s threats of forced indigenisation of the economy a
nd government’s record, a recent US Department of State report on Zimbabwe’s investment climate notes.
The report titled Zimbabwe 2006 Investment Climate Statement says that government’s mismanagement has crippled the economy, while the prevailing economic and political terrain spells dismal prospects for sound foreign investment.
“The government of Zimbabwe’s misgovernance has severely crippled the local economy, making it unlikely to attract or absorb significant foreign direct investment in 2006,” the report says.
“Investment prospects in Zimbabwe are bound to remain dismal due to the country’s unstable economic and political environment. Government policies and recent constitutional amendments have eroded the rule of law and put private property rights at grave risk.”
The report also cites government’s increased intervention in many economic sectors as “generally unwelcoming to foreign investment”, particularly from Western countries which have since slapped Mugabe and his lieutenants with travel sanctions.
The Zimbabwe 2006 Investment Climate Statement, which can be used as a barometer by potential US investors, dismisses government’s “Look East” policy described as “commensurate with its anti-West stance”, as reaping limited investment from Asia.
It adds that government’s continued disregard of the constitution by expropriating private property without compensation and barring recourse to the courts in the case of those aggrieved “has raised serious questions about respect for property rights and rule of law. Any potential foreign investors should take into account the risk of uncompensated expropriation,” the report notes.
The damning report also raps the state’s politicisation of the judiciary as another contributing factor to foreign investor apathy.
“Government efforts to influence and intimidate the judiciary since the late 1990s have raised serious concerns in that area. The government and ruling elite have ignored numerous adverse judgments, and senior officials have reiterated publicly that court orders that are not politically acceptable to the ruling party will not be honoured,” the report says.” However, it says “administration of justice in commercial cases that lack political overtones are generally impartial”.