BULAWAYO – Prime Minister Morgan Tsvangirai ( pictured with Mugabe) on Wednesday said conflicting messages from his coalition government with President Robert Mugabe have fuelled uncertainty about Zimbabwe’s economic direction to discourage investors whose funds the country needs to rebuild its shattered economy.
Tsvangirai – whose MDC party has publicly differed with Mugabe’s ZANU PF over how to transfer control of the economy to local blacks – said there was no consultation on policy formulation, while policies implemented by the government had failed to create a predictable environment for investors.
“As a government we acknowledge that we have not been able to implement policies that ensure predictability for investment in our economy,” Tsvangirai told a business leaders’ conference on the sidelines of the ongoing Zimbabwe International Trade Fair (ZITF).
The former opposition leader who has wrangled with Mugabe over how to share executive power since the two former foes agreed to form a government of national unity last year said conflicting messages from government leaders had created uncertainty among investors.
Failure to fully implement the power-sharing agreement that led to formation of the unity government as well as continuing lawlessness and violence in the key farming sector have also marred Zimbabwe’s image as a viable investment destination, Tsvangirai said.
“Conflicting messages and lack of consultation have created an air of uncertainty in our investment climate . . . incidents of violence, farm disruptions and other illegal practices (continue) to mar our image,” said Tsvangirai, vowing he was going to act to bring coherence in government policy key to attracting investment capital.
Tsvangirai spoke as Zimbabwe Stoke Exchange (ZSE) authorities said the controversial plan to compel foreign-owned firms to cede majority stake to indigenous Zimbabweans has sacred off investors with many putting transactions on hold until there is clarity on the empowerment scheme.
“Last year our market was being driven by foreigners, upwards of 40 percent were foreigners and net buyers,” ZSE chief executive Emmanuel Munyukwi told reporters. “But from the end of January with the gazetting of the indigenisation regulations, there has been a lot of uncertainty and foreigners have put a hold on their transactions.”
Under the empowerment regulations foreign owned firms have until May 15 to submit plans of how they intend to transfer 51 percent stake to blacks.
The empowerment programme has split the government with ZANU PF backing the plan while the MDC wants the scheme stopped to allow for more consultation and drafting of new regulations that will not scare away foreign investors, while allowing for economic empowerment of the majority.
Mugabe and Indigenisation Minister Saviour Kasukuwere accept the need for consultations to improve current indigenisaton regulations but say empowerment should go ahead while consultation is taking place.
Large multinational corporations such as cigarette manufacturer BAT Zimbabwe, which is 80 percent British-owned; UK-controlled financial institutions Barclays Bank and Standard Chartered Bank, food group Nestlé Zimbabwe, mining giants Rio Tinto and Zimplats, and AON Insurance are some of the big foreign-owned firms that will be forced to cede control to locals.
The empowerment laws are silent about where or how impoverished local Zimbabweans will get money to pay for stake in the large mines and industries.
Critics fear Mugabe and ZANU PF want to press ahead with transferring majority ownership of foreign-owned companies as part of a drive to reward party loyalists with thriving businesses. – ZimOnline
