New rules a body blow for tourism

Paidamoyo Muzulu

ZIMBABWE seems to have shot itself in the foot once again following the publication of controversial indigenisation regulations which threaten to deal the country’s recovering tourism industry a body blow. Indigenisation and Empowerment minister Saviour Kasukuwere last Friday published the contentious General Notice 280 of 2012 in the Government Gazette, directing companies investing in the tourism industry to comply with the damaging Indigenisation and Economic Empowerment Act which compels businesses to surrender a 51% shareholding to indigenous people within a year.
Zanu PF politicians and their local business cronies are pushing for the expropriation of foreign-owned companies under the guise of a selective indigenisation and empowerment policy.
While the campaign is hurting business, it is feared the latest regulations threaten investment in tourism and the successful hosting of the 2013 United Nations World Tourism Organisation (UNWTO) general assembly to be co-hosted by Zimbabwe and Zambia in Victoria Falls and Livingstone, a major opportunity to revive the sector.
Government has already ruined commercial agriculture and is undermining finance and banking, mining, manufacturing and other sectors of the economy through its indigenisation policy widely seen as mostly benefitting political bigwigs and the well-connected in Zanu PF.
Kasukuwere’s latest indigenisation push is likely to scare away potential investors, particularly when it comes to construction of the proposed Victoria Falls Convention Centre and other infrastructure ahead of the UNWTO assembly to be held from August 24 to 29 next year.
The event is expected to spur infrastructure development and tourism growth in Zimbabwe, but the heavy involvement of China in the preparations has raised fears the country will mortgage more resources to the Asian giant.
Zimbabwe does not have the financial resources to build a convention centre, upgrade the Victoria Falls and Harare International airports, improve health and hotel facilities, upgrade border posts and invest in power infrastructure and dualisation of roads.
Critically, the national flag carrier, Air Zimbabwe, has virtually collapsed and something needs to be done about it if the UNWTO event is to be a success. With the troubled Air Zimbabwe almost grounded, the country would have to depend on foreign airlines to fly the expected delegates and tourists.
Tourism minister Walter Mzembi told parliament a fortnight ago that China was providing much of the funding for the conference.
“We have signed a concessional loan agreement of US$150 million with China Eximbank (Export and Import Bank) for the expansion and refurbishment of Victoria Falls Airport,” said Mzembi. “This would allow big long haul planes to fly directly to the resort town.”
However, Mzembi neither disclosed the conditions of the loan nor gave indications as to when the loan deal would be brought before parliament for ratification.
China, which seems exempt from indigenisation laws, has been heavily involved in funding most of the country’s current infrastructural projects such as the Harare-Norton road dualisation, construction of dams countrywide, the National Defence College and building of a new hotel adjacent to the National Sports Stadium.
In return, Zimbabwe has mortgaged some of its mineral wealth like the Marange diamond fields, platinum resources along the Great Dyke and vast amounts of gold and chrome mining claims.
Zimbabwe is currently in election mode ahead of polls likely just before or after the UNWTO event, and Mzembi warned parliament a violent campaign would cost the country dearly.
“In Zimbabwe, the need to maintain the current peace and security cannot be over emphasised. Without peace and stability, we can kiss goodbye to any hopes we may be entertaining of a tourism boom, including the hosting of the UNTWO General Assembly in 2013,” Mzembi said.
The indigenisation regulations affecting tourism are likely to achieve exactly what Mzembi fears — undermining the tourism sector which was almost decimated by the political and economic crisis between 2000 and 2009.