New Zimbabwe.com

Investor interest in Zim up after EU sanctions

THERE is increased interest in Zimbabwe from foreign investors after the European Union (EU), eased sanctions against senior government officials and companies, a local asset management firm said on Thursday.
Zimbabwe’s relations with western governments broke down in 2000 over allegations of human rights violations and electoral theft against President Robert Mugabe and his Zanu PF party, charges which he denies, but ties have thawed in recent times.
The EU has lifted sanctions, mostly travel bans and financial restrictions, on all senior Mugabe allies, but still maintain them against the veteran leader and his wife, along with a state-owned arms firm.
In recent weeks, EU member states – Denmark and Switzerland have indicated intentions to restore normal ties, while the European Investment Bank last week said it would resume lending to the private sector, although arrears of about $300 million preclude direct lending to the government.
The EU has also said it might resume direct development aid to Zimbabwe later this year.
“As Invictus we have seen an increasing number of enquiries from investors which we haven’t seen in the last four or five years,” Invictus Capital managing director, Ritesh Anand told chief executives attending seminar on Thursday on how to attract foreign direct investment.
However, Anand said investors were hesitant to invest in the country due to political, economic and regulatory uncertainty, adding that there was need for consistency, transparency and accountability to attract investment.
“What investors look for is consistency: tell me what are the rules of engagement and once I know the rules then I know whether I want to engage or not,” he said.
Anand urged government to set up an advisory special economic taskforce on policy to attract FDI, which he said was critical for economic growth in the absence of domestic liquidity.
He said the government’s five-year economic blueprint – ZimAsset, which requires $27 billion funding until 2018 was ambitious but achievable.
“As a country, rather than being critical of ZimAsset, we need to find a way to make this policy work and find specific things we can focus on to drive foreign direct investment inflows,” he said.
FDI flows to Zimbabwe account for less than one percent or $350 million a year of the five percent global flows to Africa which rose to over $80 billion last year from $10 billion 10 years ago.Advertisement

“Capital is not passionate, neither is it pity and no one will give you any money because they love you or because they feel sorry for you,” remarked Barclays Bank Zimbabwe chief executive, George Guvamatanga, who was moderating the seminar.