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Mkwasine takeover to scare away investors

Eric Chiriga

THE recent takeover of Mkwasine Estates by the government will adversely affect sugar production and ultimately scare away existing and potential inves

tors, industry and business leaders have warned.

Government a fortnight ago announced that it had taken over the Mkwasine Estates which had been, for about two years, earmarked for acquisition under the land redistribution programme.

“Government has formally advised of its acquisition of Mkwasine Estates following the promulgation of the Constitution of Zimbabwe Amendment (No 17) Act on 14 September 2005,” said James Maposa, the managing director of Anglo American Corporation of Zimbabwe (Amzim).

The development comes against the backdrop of Mines minister Amos Midzi and more recently President Robert Mugabe’s announcement of government’s intention to take over at least 50% shareholding in all existing and future foreign-owned mining concerns.

Amzim is the holding company of Hippo Valley Estates, the controlling consortium of Mkwasine Estates together with Triangle.
Maposa said the impact of the development on operations would be determined by the performance of the proposed resettlement programme.

Cane production on resettled farms has been poor due to lack of inputs and skills.

“Cane production has been severely curtailed due to minimal application of fertiliser and sub-optimal irrigation on resettled plots,” said Maposa.

Luxon Zembe, president of the Zimbabwe National Chamber of Commerce, condemned the move by government, saying this would hurt investor confidence.

“Considering that the sugar estates were one of the country’s major investments and foreign currency earner, it is a really unfortunate development,” Zembe said.

Zembe said the decision by government would reduce sugar production due to improper utilisation of the land by the resettled farmers.

“The government is just parcelling out land to the common man who has no technical know-how of cane farming and sugar production.”

Zembe further said the move had clearly shown that the government had not learnt any lessons from past mistakes.

“We are shooting ourselves in the foot. At this time we are saying can we stop these disturbances and lure required foreign investment and turnaround the economy,” Zembe said.

Economist John Robertson said the decision to take over Mkwasine would further damage the prospects of attracting new investors into the country.

“We desperately need new investors and government funds cannot do what investors’ funds can,” Robertson said.

He said small-scale farmers were reluctant to invest in sugar production.

“Farming is a capital and knowledge intensive business. This is going to be another disappointing experiment,” Robertson said.
Maposa said discussions were going on between the relevant authorities, Hippo Valley and Triangle on the proposed resettlement model for Mkwasine.

He said Amzim was currently not pursuing any project in the country, besides developing the Unki Platinum Mine.
“Amzim’s remaining assets consist of sugar estates (Hippo Valley), a portfolio of listed shares, cash and Unki Platinum,” said Maposa when asked about the company’s remaining investments in Zimbabwe.

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