British ambassador Mark Canning on Wednesday walked out of a business forum after clashing with Youth, Indigenisation and Empowerment minister Saviour Kasukuwere over his preferred investors in foreign direct investment (FDI)-starved Zimbabwe.
Kasukuwere, the chief architect of the controversial indigenisation regulations compelling foreign-owned companies valued at US$500 000 and above to dispose 51% interest to locals, blasted targeted sanctions imposed by Britain on President Robert Mugabe and his inner circle for worsening Zimbabwe’s investment climate, currently ranked one of the worst on the globe.
Addressing delegates at the second Independent Dialogue, a forum sponsored by the Zimbabwe Independent which engages business and policymakers on key issues affecting the country, Kasukuwere went on the offensive against Britain when he said Zimbabwe would consider last any investment from its former coloniser.
His remarks deal a body blow to a country whose FDI has plummeted to 5% from a regional average 25% of Gross Domestic Product (GDP). Analysts say low inflows of FDI could derail the country’s plans to emerge from a decade-long contraction.
The remarks seemed to have irked or disappointed Canning who reacted to the minister’s statements with chagrin.
“Any investment that will be coming from Britain will be looked at very negatively. If you want to invest in this country, fine. But with British investment, I would use the Malaysian parlance, ‘buy British last’. You ask me why, they come here to invest and put you under sanctions again,” Kasukuwere said.
He said the southern African country would register GDP growth buoyed by controversial black empowerment policies.
Government has since 2000 undertaken a violent land reform exercise that has resulted in vast tracts of arable land previously owned by white commercial farmers of South African, British and other European descent being expropriated.
Kasukuwere of Zanu PF, is expected to sell the indigenisation policy as an election trump card in the next polls slated for next year.
“This country is recording an 8% growth this year. Where is it coming from? It is coming from our people, our farmers. The land reform programme is actually driving the economic recovery of Zimbabwe. Now if you say indigenisation does not work, I do not know what you are talking about. It is our sovereign right to decide on who should invest in our country. You can’t tell us to do what you want.”
Canning criticised the ongoing indigenisation exercise saying British investors viewed it as “crude populism”, adding he was “disappointed” by Kasukuwere’s hostile remarks.
“Everything that minister Kasukuwere said will send shivers down the spines of investors,” Canning said.
“Indigenisation should be the rule of law. I can only express my disappointment at what I heard.”
On sanctions, Canning said business had the “intelligence” to discern what the restrictive measures entailed.
Kasukuwere then tried to tone down his mantra, but the message had been sent.
The diplomat walked out of the meeting before time only for Kasukuwere to proceed saying the debate would continue fruitfully after the “whites” had exited.
He said there was no going back on indigenisation and urged companies to cooperate to find the way forward. He said while he did not intend to climb down on the 51% indigenisation threshold, he was prepared to listen to representations from business and consider variations where necessary.
The UK is, according to statistics from ZimTrade, a quasi-government body responsible for trade promotion, Zimbabwe’s eighth largest source of imports.
South Africa, ranked as the country’s major trading partner, contributed over $2 billion in imports last year, mainly in the form of finished and intermediate goods.
Ironically, the US, widely perceived by Zanu PF politicians as a “proponent of regime change” on President Mugabe’s administration, comes a distant second accounting for 7,8% of Zimbabwe’s imports.
China, now seen as the country’s bellweather friend, stands at position five, accounting for 3,7% of Zimbabwe’s imports.