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Aussie firms on the fence

AUSTRALIAN ambassador to Zimbabwe Bronte Moules says companies from her country will only consider investing in Zimbabwe after the successful implementation of political and economic reforms.

Nyasha Chingono

Bronte Moules

Moules told the Zimbabwe Independent on Wednesday that although a number of big Australian companies have shown interest to invest in the country, the majority of them remained wary of Harare’s poor human rights record and a repulsive economic environment underlined by a serious liquidity crunch as well as a chaotic financial system.

“There is a lot of interest. There has always been a lot of interest. Quite a lot of companies are in a wait-and-see mode, I would say. But there is a lot of hope that Zimbabwe will transition in a positive way,” Moules said.

“There is a lot of understanding because of the potential in Zimbabwe. Between Australia and Zimbabwe there has been a lot of closeness. Mining and agriculture are among some of the areas. We have got some Australian companies already doing business in Zimbabwe, Prospect Mining Resources on the lithium side so it’s an area with such potential. But we need to see more in terms of implementation of political and economic reforms,” Moules said.
“There are a lot of good ideas out there. We are following the 2019 budget with some detail. All these things are important but what we are interested in like everyone else is to see how these things are implemented.”

Moules said although Australia was keen on assisting the Mnangagwa administration, her government needed to see quality reforms in the realignment of laws to the constitution, fiscal discipline, reducing the budget deficit and entrenching the rule of law.

“We deal with the government of the day and we welcome the commitments President Emmerson Mnangagwa has made to political and economic reforms. Anything that will be good for this country, we will support. If there are practical ways through capacity building or technical support we will do in the context of a genuine programme. If it’s good reform, if it’s good quality reforms, we will back it,” Moules said.

Australia already has a footprint in mining through Prospect Resources, a lithium company that struck a sales deal with Chinese company Sinomine for its Arcadia Lithium Mine last year while Invictus Energy is also in the process of prospecting for oil and gas in Muzarabani.

Zimbabwe has been grappling with challenges of the repatriation of funds where several foreign companies struggle to remit profits to their parent countries.

Airlines are among the most affected as over US$70 million has been locked in Zimbabwe for the past year.

Ahead of the July 30 elections, Mnangagwa promised to transform Zimbabwe into an investor-friendly destination after the departure of former President Robert Mugabe whose hostile policies, particularly the chaotic land reform programme, turned the country into a pariah state.

Last year, Zimbabwe attracted US$470 million in foreign direct investment, making it the least attractive destination in Southern Africa with only a fraction of its projected annual target of US$12 billion.

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