ZIMBABWE last week won its biggest foreign investment in a decade with a US$750 million steel deal, but that left other firms even more confused about the rules of business in the troubled nation.
The agreement gives India's Essar Group a 54-percent stake in the mothballed state steel firm Zisco, in a deal worth 12.5 times the total foreign investment recorded in Zimbabwe in 2009.
But the deal contravenes Zimbabwe's new equity law, which requires locals to hold majority stakes in major companies. Officials have tip-toed around the contradiction, but it's not the first time the new rule has been waived.
In September, pan-African banking group Ecobank Transnational was given the green-light to acquire 70 percent of Zimbabwe's Premier Bank, following a $10-million capital injection.
Other companies now wonder how or if the law, vociferously defended by veteran President Robert Mugabe, will apply to them.
"Many people are worried about the execution of the law or how it would be applied," said Kojo Parris, a South African investor.
"There is need for clarity on how the law would be applied or how exemptions would be applied."
The law requires locals to own 51 percent stakes in major firms, a rule that indigenisation minister Saviour Kasukuwere defended during an investment conference.
"We believe as government we were getting a raw deal from foreign firms, especially from mining sector," Kasukuwere said.
When Zimbabwe's unity government took office two years ago, officials confidently predicted a surge in foreign investment, which until now has proved elusive.
Euromoney, the financial services group behind last week's conference, still ranks Zimbabwe as among the riskiest destinations in Africa, alongside countries like Somalia and the Democratic Republic of Congo.
While the economy began growing again in 2009 after 12 years of contraction, the fragile unity government has yet to win over investors, due largely to conflicting messages from Harare.
Economic ministries are now under the control of Prime Minister Morgan Tsvangirai, who has relentlessly pitched the country to investors.
The security apparatus remains firmly under the control of Mugabe, who snubbed the investment confab, held one week after he threatened to seize firms from western countries that maintain an asset freeze on him.
Despite the mixed signals, 250 potential investors came to Harare last week, representing mainly banks, mining and retail companies.
Capital-intensive businesses like mining and manufacturing have generally shied away from new investments in Zimbabwe, while retail and services have proved more willing to jump in, especially from neighbouring South Africa.
South African retailer Pick and Pay has increased its stake in local stores from 25 to 49 percent. South Africa's Spar has also expanded its presence, while international banking group Investec has upped its stake in OK Zimbabwe stores.
"Investors in the basic consumer sector such as those in retail always do well in economies that are coming out of a crisis," said Ritesh Anand, managing director of pan-African fund manager Invictus Investment.
Jonathan Chenevix-Trench, founding partner of British investment group African Century, told AFP the key to riding out the risk was to plan for the long term.
African Century has bought 25 percent shares in Zimbabwe's Stock Exchange and London-listed National Merchant Bank.
"When investing Zimbabwe you must have long-term plans," he told AFP. "I personally welcome the indigenisation policy as everyone needs predictability. The key thing about the law is trust."