Candid comment: Rhetoric will not fool investors

DEPUTY Prime Minister Arthur Mutambara’s suggestion that sanctions are scaring away investors and Prime Minister Morgan Tsvangirai’s dismissal of investors’ concerns smack of hypocrisy, especially coming from people who should know better.

It is pointless for the country’s leaders to try pulling the wool over investors’ eyes because those who hold the key to investment inflows are not that gullible.

 

When he addressed the World Economic Forum for Africa in Tanzania, Mutambara seemed convinced that
the removal of sanctions would miraculously heal the deep wound that has caused the economy to limp for so long.

Tsvangirai chipped in with an announcement that the country no longer posed a risk to investors and that the political crisis that destroyed the economy no longer exists. Although the premier’s view that Zimbabwe should not miss the “investment boat” makes sense, he risks being taken for a simpleton on the world stage.

It is common knowledge that Tsvangirai is under pressure to fulfil terms of the GPA relating to the removal of sanctions but this should not be done at the peril of misleading investors who would, in due course, do due diligence exercises that will expose any lies from politicians.

While it is true that the oil of the house is not for strangers, it is pointless to mislead investors when the GNU is divided over such issues as the indigenisation agenda being pursued by Zanu PF and a plethora of “outstanding issues”. Investors are watching from the sidelines as the principals to the transitional government bicker. Only an end to this bickering will mark a starting point towards convincing capital that Zimbabwe is a safe investment destination.

Instead of spending taxpayers’ money on gallivanting around under the guise of courting investors, the three parties to the GNU should get down to work, which entails a quick resolution of their differences.
In the absence of seriousness on the country’s political front, it is hard to fathom how Zimbabwe can move forward. Government officials need only look at the number of countries that have not fulfilled financial pledges made before the formation of the transitional government. The reluctance of these countries reflects the deep-seated mistrust that is keeping investors away. The GNU principals know that stalling on outstanding issues is the reason why investors are either sitting on the fence or completely shunning the country.

For starters the government needs to achieve some level of coherence and policy consistencies. Tsvangirai and Mutambara cannot expect to woo investors when the man in charge, President Robert Mugabe, continues on a tirade against the West. Investors are naturally unnerved by such tirades and this does not bode well for investor sentiment or investor confidence, the basic requirements for engagement with capital.

Elsewhere in this paper, we report concerns from the Bankers Association of Zimbabwe that politicians are not doing enough to mitigate the Zimbabwe country risk, a factor that is turning off providers of lines of credit.

Add to this pronouncements on indigenisation legislation that have given the impression that the government has endorsed the grabbing of stakes in industrial concerns. No sane investor would want to pour their money into projects in Zimbabwe when they know that they will not hold the controlling stake. While the idea of empowering locals is noble, it should not destabilise industry or the economy at large. There are many ways in which locals could be empowered and these include funding the resuscitation of collapsed enterprises that were once the mainstay of industry.

Already companies such as Pretoria Portland Cement are indicating that they may not be keen on doing business in Zimbabwe if the indigenisation law is implemented in its present form.

The government also needs to deal with the soap opera of government ministers who play out their differences at press conferences. When whole government ministers and a prime minister play to the gallery on policy issues as if there are no cabinet or council of ministers meetings, one is left wondering whether anything meaningful is discussed at these forums. The brouhaha surrounding the civil servants’ salaries creates an impression of a government that lacks cohesion.

The arrest of company executives — justified or not — over the past few years has also done very little to inspire confidence.  While justice must take its course, it should not be seen to be used as a tool to persecute those who disagree with the authorities.

 

BY EDWIN DUBE