Zimbabwe business climate holds back eager British investors

British companies are quite keen on investing in Zimbabwe, but a perceived lack of respect for property rights and an uncertain business environment remain drawbacks, a top United Kingdom envoy said.  Currently, the British investors are eyeing the financial, power and railway sectors.

According to the British deputy ambassador, Chris Brown, at an economic symposium, there has been several inquiries on Zimbabwe despite a disputed election last year.  He said, “I see much more interest now from investors than I saw before the elections, but even now most of the people who come to Zimbabwe still decide at the end of the day not to put their money here or to put less of their money here than they would have done.”

He also stated, “This is not about trade fairs or branding, we know what holds back the investors, it’s concerns about the business climate.”  Brown is of the view that investors were not worried about empowerment policies, but more about property rights.  He further pointed out, “If the government doesn’t soon articulate a really clear approach on achieving empowerment and respect property rights, Africa, I fear, will continue to rise without Zimbabwe.” .

Property rights in Zimbabwe have been under the spotlight for the last 15 years after the government seemed to sanctions the invasion of white owned commercial farms by what it deemed land hungry peasants.  The commercial farmers were not compensated, sparking tense relations between Zimbabwe and Britain.

The government is in the process of implementing black empowerment laws, raising fears that more property will be lost without compensation.  Brown reiterated that Zimbabwe had huge potential to attract more investment than most African countries but remained hamstrung by unfriendly policies and environment.

Zimbabwe has seen its attractiveness to investors take a deep in recent years, being ranked 172 out of 185 countries in the ease of doing business survey.  Furthermore, the International Monetary Fund (IMF) projects that Zimbabwe’s macroeconomic environment is expected to remain challenging in 2014.

Source: The Africa Report