Policy consistency key to Zim investor confidence boosting

18 Feb, 2018 - 00:02 0 Views

The Sunday News

Dr Bongani Ngwenya

Preamble:
ZIMBABWE is now open for business. There is no doubt that the country has gained tremendously with regards to investor confidence since the dawn of the new political dispensation. For example, the indigenisation policy and programme which had remained an albatross around the neck of the economy since the enactment of the policy, has been amended.

I am not suggesting that the investors’ sudden warming up to the country is solely being motivated by the amendment of the indigenous policy.

However, it is no common secret that the indigenisation policy did have a significant negative impact on the country’s investor confidence index rankings among other factors as well, which are not necessarily the subject of this discourse.

The new political dispensation has come out clearly and has been consistent regarding the indigenisation policy which has seen its jurisdiction confined to two minerals — diamonds and platinum. There is no doubt that streamlining of the policy and consistence in its new interpretation has influenced the sudden attention and attraction into the country’s mining sector by investors, especially foreign investors.

This is unlike what used to happen in the past where each minister in charge of the responsible ministry would interpret this indigenisation policy according to his/her personal whim. The worst scenario being a clash of interests among various ministries. It was clear that the indigenisation policy was “captured” or hijacked for political self-engradisement. When all this was happening, we had a head of state that was taking an indifferent disposition at the expense of the country’s economy, while investor confidence continued waning. It is very clear that in the previous dispensation, Government policies, good or bad, such as the indigenous policy before its current amendment, lacked leadership direction and commitment.

Investor confidence boosting effort so far:

In contrast, when President Emmerson Mnangagwa immediately assumed leadership, he pushed policy driving responsibilities to lead his Government on the direction that the new dispensation had resolved to take. He enunciated a raft of measures that Government would take as it hit the ground running. From there the nation and the world at large heard it from the horse’s mouth that Zimbabwe is not the same again and will never be the same again. It is now open for business and Government is committed to protecting property rights and will ratify the Bilateral Investment Promotion and Protection Agreements.

The country is also ready to friends as they come from the east, west, north and south. As early as about six weeks into the new dispensation, the country had already started receiving positive signals across the world in the Western countries from the United Kingdom, German, France, India, China and Brazil, among others and including our continent, especially from the neighbouring South Africa. The most exciting positive responses to the appeals of our Government for investments are the ones from our own fellow brothers and sisters in the diaspora.

The country recently saw the delivery of the first consignment of the 108 wagons and seven locomotives that were acquired from South Africa as part of the resuscitation of the National Railways of Zimbabwe. This was part of the $400 million recapitalisation of the deal between the Government, South Africa firm Transnet and the Diaspora Infrastructure Development Group. There are sentiments, however, that this particular deal was entered into during the previous Government.

It is my personal conviction that entering and signing deals is something else, but what matters most is the implementation. The previous administration entered into so many deals including deals with Zimbabwe’s all weather friend-China, and very few of those deals saw the light of the day in terms of implementation. I remember I used to say to my MBA students in class at Solusi University that the Chinese are very serious investors and that is why China is number two largest economy after United States of America today.

My argument was that, the same conducive investment environment that the West had always clamoured for was the same that our all-weather friends wanted or expected as well. Now that the new administration has proven that it is willing and committed to necessary reforms, I would love to be proven wrong. In this new administration we are going to see serious Chinese investment inflows. So much so good about that. I was impressed reading in the news on line that Mr Aliko Dangote is contemplating coming to resuscitate his investment deals, our own Mr Strive Masiyiwa planning to come to the country after a very long time, our own Mr Mthuli Ncube contemplating investing in the country once again. One is reminded of the demise of his Barbican Bank.

Potential foreign investors get so excited when they see the diasporas, that is Zimbabwe’s own children embracing the call by their President to come and invest in their country. Such a phenomenon send positive signals with regards to improving investor confidence. It is not surprising to see how the President’s message — Zimbabwe is open for business — has been positively received both regionally and globally, particularly by the United Kingdom and South Africa.

Of late the nation has been advised that more than $3 billion potential investment deals have been entertained with serious intentions to be implemented. All this is practical evidence and symptoms and signs of improving investor confidence in the country. Policy consistence is paying dividends. By the way the President has also assured potential investors, particularly foreign investors that with regards to the repatriation of their profits, they would be able to do so without any impediments of the past as they would have come into the country to make money while the country economically benefited as well.

In conclusion, the Government has to move with speed to regularise these policy pronouncements through legal instruments. By so doing the investor confidence of the country would increase even much more as the country embarks on international engagement as well. The country is already receiving goodwill and it would be good to ride on this goodwill and show our commitment by legally regularising all our commitments as a country.

-Dr Bongani Ngwenya is based at the University of KwaZulu-Natal as a post-doctoral research fellow and can be contacted on [email protected]

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