Speaking at the launch of the Zimbabwe Independent annual Banks and Banking Survey in Harare yesterday, Muradzikwa said the real problem facing Zimbabwean banks and the economy in general was foreign investors shying away from the country because they see the government of national unity as a marriage of convenience which could break down at any time.
“It goes without saying that the real problem and challenges (why investors are not coming to Zimbabwe) is related to the politics of the day,” Muradzikwa said.
He said issues such as technology, networks, diversified activities, capital markets and liquidity were only symptoms of the real problem.
“It is a fact, as unpalatable as it may sound, that most foreign investors, those with the muscle to inject the needed liquidity in to the economy, do not view the inclusive government as a genuine power-sharing arrangement, nor do they necessarily bank on the stability and effectiveness of this government,” said Muradzikwa who was the guest of honour.
Foreign direct investment (FDI) in Zimbabwe totalled US$60 million in 2009, an increase of $8 million from the US$52 million recorded the previous year, according to the World Investment Report released in July by the United Nations Conference on Trade and Development (Unctad).
Communication between President Robert Mugabe and Prime Minister Morgan Tsvangirai is said to have broken down after the president unilaterally re-appointed provincial governors, and appointed judges and ambassadors, among others, which outraged the premier and re-ignited their fierce rivalry.
Mugabe and Tsvangirai’s relationship is said to have deteriorated further last week after the prime minister boycotted cabinet for the second time this month
Mugabe last week said he wants the referendum on the new draft constitution in March and elections in June next year.
Analysts say his relations with Tsvangirai will almost certainly get worse towards elections.
“With the prospect of an election and the potential wave of violence this may unleash, the risk perception and thus investor appetite for Zimbabwe could be turning negative,” Muradzikwa said.
Muradzikwa said the long term sustainability of the banking sector and the economy in general depends on foreign direct investments and the resumption of balance of payments support from the IMF as well as official development assistance.
“These international capital flows depend on the stability, certainity and predictability of socio-economic and political conditions,” he said.
Speaking at the same function, FBC Holdings chief executive officer Livingstone Gwata said monetary authorities and banks should encourage people to use plastic money given the convenience and safety that is associated with the system against a background of increased fraud and fake US dollar notes circulating due to cash transactions.
Gwata said there was an increase in robberies, theft and fraud, which served to highlight the need for business and the public to revert to using the banking system and plastic money.
“If there is a country in the world whose payments system need to go totally electronic, it is Zimbabwe,” Gwata said. “We are using a currency that is not ours, it is expensive to import, we have no change, there is a high risk of fake as well as soiled notes, risk of robbery and theft is on the increase. In the retail network customers are losing their hard-earned money through getting pieces of paper for change or worse sweets for change.”