A fortnight ago, I travelled to Australia where I attended a three-day Africa Down Under mining conference in Perth, one of the biggest mining conventions between Australia and Africa, rivalled only by Diggers and Dealers in Kalgoorlie and the Mining Indaba in Cape Town. The conference was attended by more than 1 200 delegates, including mining executives, investors, bankers, fund managers and government officials.
During the Down Under indaba, it became clear that Zimbabwe urgently needs to change its mindset on economic policy and relations with investors.
The country desperately needs a paradigm shift. It needs to go back to basics and emulate other countries to attract the limited foreign direct investment (FDI).
Throughout the conference, as mining executives made presentations on mining projects and new investments in Africa, it was clear Zimbabwe was not on the agenda.
If it is to compete with other African countries for FDI, it needs to create investor-friendly policies, remove legislative and bureaucratic obstacles by revising legislative and procedural processes that deter investment.
For the country to regain its status as a destination of choice for investors, a radical shift in the way it conducts business is thus quintessential. This involves transparency, clamping down on corruption and introducing appropriate legislative frameworks, including making substantive amendments to toxic policies such as indigenisation and easing the process of obtaining licences.
Government is, however, proposing to amend the Companies Act and other relevant investment regulations to align them with best business practices. It also intends to reduce the period of registering a business. The period for approving investment would be reduced from the usual 21 days to 24 hours in respect of company registration. With immediate effect, investors who are in the process of making business enquiries and those to come will be handled by an inter-agency platform co-ordinated by the Office of the President and Cabinet to supposedly avoid unnecessary bureaucracy.
However, talk is cheap and from the concerns raised by Australian investors, this will be far from adequate. There is no doubt among many Australian investors that Zimbabwe can be an attractive investment destination due to its rich mineral resources, but it is scaring away potential investors through its muddled and vague policies.
Mining executives at the conference raised concern over hostile policies, as exemplified by the indigenisation legislation, which they said is a deterrent to investment. Investors are less concerned about the politics of the country — who is ruling or not, but the business environment.
They will only invest in stable countries with clear legislative frameworks, attractive incentives and good tax systems.
Government needs to act swiftly to overhaul indigenisation laws, remove policy inconsistencies and flip-flopping and other obstacles to investors.