Foreign investors are not Mother Theresa


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“We are going to take charge of our own lives like the Zimbabweans have done. You can say whatever you want to say about Zimbabweans. In the next 10 years they will be the only Africans in the whole of Africa who own their country because, why, they were ready to take the pain. Revolution is about pain. Revolution is change and change is painful. We are ready for that pain. We need that pain.”

These were the words of South Africa’s Economic Freedom Fighters leader Julius Malema during his 2014 election campaign. Some 1 169 259 people voted for the party making it the third biggest party in South Africa.

But Zimbabweans do not seem to see things the same way. Even the Zimbabwe African National Union-Patriotic Front which won more than two-thirds majority, on the indigenisation and empowerment platform, is dithering.

Speaker of Parliament Jacob Mudenda last week had to save Indigenisation and Empowerment Minister Francis Nhema from explaining whether the government had changed its policy on indigenisation saying the highest office had spoken on the subject on more than two occasions. The question had been asked by another high-ranking ZANU-PF legislator, David Chapfika, a former Deputy Minister of Finance and current chair of Parliament’s Budget and Finance Committee.

Zimbabwe is being hammered day-in, day-out that it is failing to attract foreign investment because its indigenisation policy is scaring investors away. Foreign investment is being touted as the panacea to Zimbabwe’s woes.

But recent studies are increasingly showing that foreign investors are not Mother Theresa. They are siphoning billions of dollars out of the third world and Africa in particular. A report released by Global Financial Integrity last week, entitled: Hiding in plain sight, says that third world countries are losing US$542 billion a year through illicit financial outflows. Trade misinvoicing accounts for 80 percent of this amount, or US$424 billion.

The study, which looks at five African countries regarded as models for growing economies on the continent- Ghana, Kenya, Mozambique, Tanzania and Uganda, says the five have lost US$60.8 billion in the 10 years from 2002-2011 through misinvoicing.

Tanzania lost the highest amount of US$18.73 billion, followed by Ghana with US$14.39 million and Kenya with US$13.58 billion. Uganda and Mozambique lost US$8.84 billion and US$5.27 billion, respectively.

The report says the countries have also been losing heavily on taxes. It says Kenya is losing US$435 million through tax evasion every year, with Ghana losing US$386 million, Tanzania US$248 million, Uganda US$243 million and Mozambique US$187 million.

But that is not all. Despite their impressive economic growth figures, Afrobarometer says poverty is increasing in some of the countries. Its study released in October last year showed that poverty had increased most in Botswana, Mali, Senegal, South Africa and Tanzania. It had declined most in Cape Verde, Ghana, Malawi, Zambia and Zimbabwe.

With such massive outflows, in countries regarded as Africa’s models, people should be asking how much more Zimbabwe would lose, first because of the pervasive corruption in the country, and secondly because it is using the United States dollar?

While Zimbabwe needs foreign investment, it must put its house in order first. One Zimbabwean quipped: “Tinomhanyirei? Zviri nane kugara nehupfumi hwenyu huri pasi pane kuzochema musisina chinhu, vakomana vatora. (What the rush for? It is better to keep your resources unexploited than to lament later when it has been exploited and the country has nothing to show for it).

(16 VIEWS)

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Charles Rukuni
The Insider is a political and business bulletin about Zimbabwe, edited by Charles Rukuni. Founded in 1990, it was a printed 12-page subscription only newsletter until 2003 when Zimbabwe's hyper-inflation made it impossible to continue printing.

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