Foreign investors hold back

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Foreign investors have made applications worth billions of dollars, with the mining sector attracting over $1 billion, but most of the investments have not been realised because of the country’s indigenisation laws, Economic Planning and Investment Promotion minister Tapuwa Mashakada has said.

Mashakada said even the Chinese, who have been described by President Robert Mugabe as all-weather friends, were not investing much into the country compared to other African countries.

He said last year China invested more than $200 billion in Africa, but of the amount only $150 million found its way
into Zimbabwe.

Mashakada told parliamentarians during the question-and-answer session on Wednesday that despite applying to do business, foreign investors were unwilling to release their money because of requirement that 51% of shares should be in the hands of indigenous people.

“In fact between January and June we have had applications of over $1 billion in the mining sector. These are mere applications, but the investors have not released money,” he said.

“Applications are coming, but in terms of implementation, there is a wait-and-see attitude . . . They are still monitoring the direction we are taking on the indigenisation. Generally no one wants to invest their money where they don’t have a controlling stake.”

Mashakada said mixed messages coming from the government were also confusing investors while the recent cancellation of mining licences by Indigenisation and Empowerment minister Savior Kasukuwere had also scared investors.

The cancellation of Blanket Mine operating licence was, however, later reversed while the threat to withdraw Zimplats’ licence did not see the light of day.
The minister called for relaxation of the indigenisation law to allow for investment, economic growth and the creation of jobs.

He said there was hot competition for investors from other countries in the region such as Angola, Mozambique and Botswana such that Zimbabwe had to lay attractive polices to get its share.