THE ruling Zanu PF seems bent on throwing a spanner in the works of central bank governor Gideon Gono to build foreign investor confidence by pulling left while the RBZ boss is talking of
Gono and Zanu PF appear to have parallel visions and if Zanu PF’s intentions to nationalise land are anything to go by, then Zimbabwe’s hopes of winning international sympathy are doomed, analysts have said.
According to Zanu PF’s planned legislative changes, the ruling party intends to amend the constitution to allow it free rein in acquiring land, effectively nationalising the asset.
Justice minister Patrick Chinamasa is understood to have crafted a document to that effect.
Gono is trying to lure international investors to come to Zimbabwe.
Analysts say despite Gono’s efforts to turn around the economy, his major challenge is in reconciling decisions based more on political expediency than economic rationale. Gono talks of land being a bankable asset while Chinamasa and friends think otherwise.
Gono says in his monetary policy review he is “setting the foundation for a more comprehensive framework for bilateral investment promotion and protection agreements post the land reform and in the promotion of new investment”.
“We are pleased to inform our potential investment partners with whom we have been negotiating for investment that Zimbabwe, as a part of the global community, is fully aware of the need to protect and encourage inward investments as a tool to attract international capital mobilisation,” he said recently.
On the other hand the ruling party is proposing that all land acquired for resettlement automatically become state land.
“The constitutional amendment being proposed and recommended is to render and declare all land that has been gazetted and to be gazetted in the future for acquisition for resettlement purpose become the property of the state without the necessity of going through the courts,” Zanu PF says.
“The constitutional amendment will be so crafted in such a manner and form to put acquisition of land for resettlement purposes beyond legal contestation.”
A senior bank economist who spoke on condition of anonymity said that the intended nationalisation of land would send wrong signals to investors.
“Any normal investor wants to know the status of property rights which is what Gono is talking about, and makes sense in this case,” the economist added.
“Zanu PF is going three steps back yet Gono is battling to win the hearts of the very few investors who were prepared to do business with Zimbabwe. Judging by the information emanating from Zanu PF’s intended constitutional amendments, we are in trouble just like when the farm invasions started.”
Since February 2 000 when the farm invasions started, the country has not experienced any major meaningful investment inflows because of the uncertainity over property rights.
The current and capital accounts last year finished for the fifth consecutive year in deficits, figures from the Ministry of Finance have revealed.
By the end of last year, the current account had a deficit of US$463,7 million and the capital account was minus US$211,5 million.
The current account takes into account the country’s exports and imports, while the capital account takes into account issues such as foreign direct investment, portfolio investment, and long-term and short-term capital.
Bulawayo-based economic com-mentator Eric Bloch said government had to be clear on how it wants to handle the land issue, especially the subject of 99-year land leases. He said if there is no security in terms of lease agreements this could spell doom for Zimbabwe.
“The government should be forthright on what it wants to do. If they adopt this attitude of just nationalising land without any options of lease then we should forget about investment. The would-be investor will just go to any other country where it is safe to do business,” he said.
“There is also another problem of compensation, as people want to know how they would be compensated. This (compensation) has to be a matter of trust, but government has to be more forthright in whatever it is doing.”
Apparently the Zanu PF document on the constitutional amendment is silent on whether there are going to be any leases of land.