AUSTRALIAN Ambassador to Zimbabwe Mathew Neuhaus yesterday said Zimbabwe needs to urgently review its investment policies to attract the much-needed foreign direct investment.
Neuhaus told NewsDay that the current investment policies had seriously compromised the potential of the country’s major sectors such as mining to spur economic revival.
He said Zimbabwe had failed to provide security of investments due to lack of clarity, adding that policy discord on indigenisation and Bilateral Investment Promotion and Protection Agreements (Bippas) had scared away investors.
“There is no progress on the economic side. In fact, the economy has gone backwards and that is particularly sad,” Neuhaus said.
“You have problems with banks’ liquidity system and you still have major policy debates around issues like indigenisation and land ownership.
“Recently, we heard statements around Bippas and once again effectively, we have been told that they do not provide protection. We have been told that businesses can be seized despite the existence of Bippas. There has to be a change of mindset.”
Early this month, Finance minister, Patrick Chinamasa told Parliament that Bippas do not prevent the government from compulsorily acquiring assets of foreign investors.
He said that the government was only obliged to pay compensation to the foreign investors.
Neuhaus expressed doubts that Zanu PF’s economic blueprint, the Zimbabwe Agenda for Sustainable Socio-Economic Transformation [ZimAsset] would help revive the country’s economy.
Zimbabwe has been experiencing major economic downturn since last year’s disputed elections won by President Robert Mugabe.
Neuhaus said: “The government issued ZimAsset, but that is not an economic plan. It is just an aspirational document. It lists the things that it wants to achieve, but there are no mechanisms to achieve those things.”
He said it was essential for Zimbabwe to build confidence among foreign investors by putting in place policies that guarantee security of investments.
“It is a question of confidence building for this country. The government needs therefore to take away obstacles to setting up businesses and investments here.
I would say Zimbabwe is standing in its own way. In Australia, people would want to come and invest here. There is potential for investment especially in agriculture and mining,” Neuhaus said.