International investors looking to tap into Zimbabwe’s economy should not be deterred by its political problems, Finance minister Tendai Biti, has said.
Biti, touted for steering Zimbabwe towards economic stability, a task he has often described as the most difficult job in the world, has been on a mission to drum up foreign investment to help boost the country’s fragile economy.
Biti told Cable News Network (CNN) this week there was no doubt the country “needs to get its politics right, which is why an election is inevitable”.
He stressed however, the country’s doors are still open to foreign investments, urging the international community to engage more with Zimbabwe.
“What is also undisputable is that despite the political challenges, it is still a place where one can actually invest and actually get good returns,” Biti said.
Two years ago, a coalition government was formed between Biti’s party, the MDC-T, and President Robert Mugabe’s Zanu PF.
There were hopes that the stabilisation brought about by the political agreement would see new foreign investment in the country.
But political uncertainty and lack of clarity in financial policies still represent major concerns for foreign businesses.
The country’s Indigenisation and Economic Empowerment Act, passed by Parliament last year, requires foreign businesses to submit plans within five years for transferring 51% of their investments to black Zimbabweans. But Biti said the law did not mean expropriation of foreign companies.
“There’s a lot of mistrust in the Zimbabwean economy, but mistrust comes out of ignorance,” he said.
“You have to understand what you are dealing with and a lot of people don’t understand what they’re dealing with, because there’s a lot of negativity that has jumped out on the Internet and in the newspapers.”
Biti, who inherited an economy battered by record hyperinflation and 90% unemployment, said he did not underestimate the political difficulties that still exist in the country and the uncertainty over the power-sharing agreement.
“I’m not sweeping it under the carpet, which is why we need a new constitution, which is why we need the rule of law, which is why we need respect for each other, including respect for property rights,” he said.
Last year, Biti’s efforts to improve Zimbabwe’s economy seemed to have got a boost when the country was allowed to sell diamonds from the 66 000-hectare Marange diamond fields, near Zimbabwe’s border with Mozambique.
Overally, Zimbabwe has a stockpile of Marange diamonds estimated to be worth about $1,7 billion.
But according to Biti, the precious stones have not yet proven to be the “El Dorado that many people thought,” contributing only $35 million to the country’s coffers last year.
“Part of the problem lies in the illegal smuggling that we think is still happening, and part of the problem lies in the fact that we need the Kimberly Process stamp of approval,” said Biti, referring to the group which monitors trade in the precious stones to stop the use of blood diamonds to fuel conflicts.
Zimbabwe’s harvest of diamonds in the Marange district has sparked controversy in recent years after accusations by rights groups that military-run syndicates were funneling money from the diamond fields to President Mugabe’s party.