Zimbabwe, UK trade team making all the right noises

The first United Kingdom trade mission to Zimbabwe in over a decade began its visit on Tuesday, with both London and Harare committing to re-engagement after years of fraught ties.

Former coloniser Britain fell out with President Robert Mugabe’s government in 2000, mainly over oft-violent seizures of white-owned land to resettle blacks as well as accusations of poll fraud. Mugabe has accused successive British government of plotting his ouster as retribution for what he describes as necessary land reform.

Britain retains significant business interests in the southern African country, with big firms such as banks Standard Chartered and Barclays, as well as BOC Gases and dual-headquartered Unilever still operating in the country.

The main focus of the trade mission is infrastructure, where Zimbabwe has a deficit estimated at around $14 billion, according to the World Bank.

Finance minister Patrick Chinamasa and new British ambassador to Zimbabwe, Catriona Laing, addressed a press conference at the end of what both parties described as “fruitful and frank” deliberations with four officials of the five-member trade delegation which is on a three-day scoping visit.

Addressing investor concerns over Zimbabwe’s empowerment law which limits foreign shareholding in all major businesses to 51 percent, Chinamasa said the government would move to remove ambiguities on the implementation of the Act, which has been the source of much confusion among current and potential investors.

He also sought to allay fears over Harare’s commitment to property rights, a concern mostly drawn from the experiences of the land seizures.

“There is no investor who will come to an environment where the investment is not secure. As a country including the media, we have to create a conducive environment to attract investors to come to our country,” Chinamasa said.

“If there are any disputes, it’s very important that those disputes are resolved within the framework of the rule of law.”

Following its isolation by the West, Zimbabwe sought succour in the East – with China and Russia emerging as important trade and investment partners in recent years under a “Look East” policy championed by Mugabe.

Chinamasa, however, said Zimbabwe was open for investment from any quarter, adding that Britain had an advantage by virtue of its colonial ties with Zimbabwe.

Laing said government was “very” aware of some of the concerns that investors had, adding that these issues had come up in the delegation’s discussions with Chinamasa.

“Indigenisation, if not explained properly in terms of how it works in practice, could potentially put off some investors,” she said.

She, however, noted that Zimbabwe’s re-engagement with the International Monetary Fund (IMF) was an important positive signal to potential investors.

In June 2013, Zimbabwe and the IMF agreed on a staff monitored programme, an informal arrangement under which the Fund’s staff engage the partner state as it implements its economic policies but which does not entail financial support.

“That’s the kind of thing investors look out for, the IMF broadly giving a clean bill of health to the macro-economic picture. So if Zimbabwe can keep on track with its staff monitored programme, and tackle some of the tricky issues it needs to do, that will send positive signals that investors are in the  right kind of environment,” Laing said.

Head of the trade delegation, Alex Lambeth from British Expertise, a non profit trade promotion body, said the visit was the first step in reviving British business interest in Zimbabwe.

“We are looking at how to harness the finance necessary to reach the development goals of the country,” Lambeth said, adding that at the end of their visit, during which they will also meet with various economic line ministers, they would present a report to the British trade body.

Zimbabwe Investment Authority (ZIA) chairman Nigel Chanakira, who was also part of the deliberations, said Zimbabwe’s significant financial requirements, estimated at about $25 billion under the government’s economic blueprint ZimAsset, meant it could not avoid the world’s financial capital – London.

“British firms can help unlock the finance and expertise to implement ZimAsset. Finance mobilisation from all sources is critical at this point in time for economic development,” Chanakira, founder of Zimbabwe’s first locally owned commercial bank, said.

“We at ZIA support a “Look Everywhere” policy when it comes to resurrecting industry, bringing jobs and empowering Zimbabweans.”

Chanakira cited the $265 million takeover of BancABC by Atlas Mara and enquiries for a potential $100 million power project as key examples of London-driven deals impacting Zimbabwe’s economy.- The Source

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