ZANU PF, which won an absolute majority in the parliamentary polls last week, should reinvent its investment policy structures to attract investment to Zimbabwe, analysts have said.
The analysts say Zimbabwe faces a long recovery period ahead unless the Zanu PF government changes investment policies.
They say Zanu PF, still frenzied from a two-thirds majority victory over the opposition Movement for Democratic Change (MDC), faces a daunting task to assure the investing community that it will protect investments and uphold property rights.
“We have a long period of economic recovery ahead of us and unless the government reinvents its policy structures, we will find it difficult to break through. At the moment investors feel not welcome in Zimbabwe,” economist John Robertson said.
Robertson said the Zanu PF government would not succeed in attracting any meaningful investment judging by its record.
“The past profile both locally and internationally will militate against recovery efforts,” he said.
Zimbabwe National Chamber of Commerce president Luxon Zembe concurred and said if the government continues “in the old hostile attitudes, the international community will continue to isolate Zimbabwe”.
“If we continue with the antagonistic policies that have isolated us and created uncertainty and low confidence, things will just get worse,” Zembe said.
“They need to implement coherent investment policies that will determine viability of industry and quality of life of the people. We need to remove the dark cloud that is hovering above our economy by clearing the air of uncertainty, building up confidence locally and internationally,” Zembe added.
He said there was need for the government to realise that Zimbabwe is a part of the global economy and should avoid policies that drive away investors.
Zembe added: “We need to take advantage of global opportunities but that depends on our relations with the international community. We hope the government will be dedicated to the restoration of relations with the outside world.
“We still need balance of payments support and it is critical that we mend our relations with the international community. Politicians must support Reserve Bank governor Gideon Gono’s efforts to re-engage the international donor community and financiers such as the International Monetary Fund (IMF) and the World Bank,” said Zembe.
He mentioned policy inconsistency as one of the factors affecting trade agreements. For instance, President Robert Mugabe announced last year that government would demand about 50% ownership in mining ventures whereas standing agreements with foreign investors state that indigenous players will get 15% in the mining ventures.
Now that the elections are over, there is need to improve on food security and economic recovery, he said.
“You can never be proud of yourself when your children are going hungry and scrounging for survival in a country which has the potential to feed its nationals. Many of our people have left the country due to economic hardships.
For instance, unemployment is estimated at 70% with more or less the same number living below the poverty datum line,” Zembe added.
Foreign exchange inflows are likely to nosedive following a Supreme Court’s order barring the diaspora vote.
Zembe said people in the diaspora were likely to bring in hard currency through unofficial means as a direct reaction to the Supreme Court ruling.
“The Supreme Court ruling will have an impact on the Homelink initiative. People are most likely to continue bringing money into the country through means other than the official channels. We should have put in systems to allow them to vote,” Zembe said.
Zimbabwe has grappled with serious foreign currency shortages in the last five years and this has seen prices of imported inputs ballooning. Businesses have also been constrained as they fail to expand due to lack of foreign currency.
Only US$1,2 billion officially flowed into the country last year, a far cry from the US$3 billion needed annually.
Foreign direct investment has dried up as more sources were closed last year. Most non-governmental organisations (NGOs), usually a source of foreign currency, closed shop after parliament passed the NGO Bill which bars NGOs from receiving foreign funding. The Bill is yet to be signed into law by President Mugabe.