The MDC-T disengaged from the government a fortnight ago citing President Robert Mugabe and Zanu PF’s refusal to fully consummate the global political agreement (GPA) signed last year and resolving of outstanding issues of the deal.
Analysts who spoke to businessdigest said the partial withdrawal had the potential to plunge the country into deep economic and political crisis — worse than what was experienced last year.
A Kingdom Bank analyst who requested anonymity said the disengagement of the MDC-T would have a negative impact on the economic recovery process.
“The year 2008 was not good for the economy because both local and foreign investors had no confidence in the country,” the analyst said. “When the global political agreement was signed and the inclusive government incepted in February this year, investors started coming in with the hope that things such as the rule of law, property rights and human rights would be restored.”
Since the formation of the unity government, Zimbabwe has hosted several investment conferences with the aim of luring foreign investors.
Though showing willingness to invest in the country, investors have been cagey over the political situation and the current crisis would put a huge dent on investment prospects.
Zimbabwe National Chamber of Commerce president Obert Sibanda said investors had started trickling in, but the MDC-T partial pullout would send the wrong signal.
Sibanda said: “Investors were coming because of the political stability that had begun prevailing in the country. It had started giving them confidence. Any sign of collapse creates a lot of panic among potential investors who may have started showing interest in investing in the country.
“A lot of investors have been enquiring about the position in the country and the future and we keep assuring them that this is a passing phase. Some had already started querying long before the disengagement following some pronouncements in the media.”
The Kingdom Bank analyst said the situation has made investors to trade carefully.
“Investors who had adopted a wait and see attitude are beginning to see that the fear they had was right,” the analyst said. “They are beginning to realise that anything can happen. Issues such as the Nestlé and KML have indicated that there is still no guarantee of a conducive business environment.”
He added: “The only changes are the exchange control regulations; these allow capital movements but this has shown that it is not in isolation, it is not a guarantee for a safe investment destination to potential investors. It is like an amber sign at the robots, investors are proceeding with caution.”
Sibanda appealed to the GPA principals to resolve their differences amicably.
“We need to put the country first before personal interests,” he said.
Government had projected that by December capacity utilisation in industries would reach 60%.
According to the 2009 Confederation of Zimbabwe Industries (CZI) manufacturing report, the manufacturing sector is in a recovery mode as it accounted for 14% of export shipment.