THE South African government yesterday warned that Zimbabwe risked missing on foreign direct investment (FDI) if it does not complete the ease of doing business reforms, including those that relate to property rights, the Daily News reports.
This comes as the country is struggling to attract meaningful investments due to a host of reasons, which observers say are linked to suspect good governance and lack of respect for the rule of law.
Speaking at the inaugural Political Actors Dialogue (Polad) Economic Summit, in the capital yesterday — South African ambassador to Zimbabwe Mphakama Mbete — warned that the Zimbabwe is open for business mantra will remain a vision without competent reforms.
“Zimbabwe has presented itself to be open for business, which we believe is an appropriate approach to develop this country.
“However, in order to attract significant flows of foreign direct investment it is important that Zimbabwe reforms and improves its record concerning security of tenure and investment protection, repatriation of proceeds by investors, honouring bilateral trade investment agreements, the need to open up the economy to competition and optimal debt settlement.
“We believe that in a highly competitive environment for foreign direct investments these … must be upheld at all times.
“In our view failure to do so means that investment capital will always look past Zimbabwe to other safer havens,” Mbete said further.
The South African envoy further said that for Zimbabwe to revive its economy, the establishment of a social contract involving members from different sectors, would be critical.
“We think that it is important for everyone to enter into a social contract where businesses, politicians and citizens rally behind the common vision of Zimbabwe.
“Success requires mutual belief and cooperation in all areas as no one sector in society can do it alone. We are all dependent on each other to triumph,” Mbete told delegates who included guest of honour, President Emmerson Mnangagwa.
He warned that countries without stable and strong public institutions would struggle for economic recovery.
“Research shows that nations with disruptive political economic situations are likely to be poor compared to those with inclusive economics, where the rule of law is protected and ransacking political manipulation are not tolerated.
“It is important for the state to play its role in the delivery of goods and services towards a better life for all Zimbabwean citizens.
“In terms of active citizenry we believe it is important in economic development. Ultimately it is the citizens’ will which must prevail in order for any democracy to be sustainable,” Mbete said.
Meanwhile, World Bank country manager for Zimbabwe Mukami Kariuki urged the government to accelerate economic reforms to give a lift to the economy which is not expected to perform well this year.
“Zimbabwe’s economic growth has been on a downward trajectory because of the combination of the external and internal environment.
“Some of the difficulties with the implementation of reforms have caused the escalation of prices leading to poverty. We expect that this will still be a problem for us in 2020.
“So addressing these challenges will require very bold action … to implement the difficult reforms … to kick-start the engines of growth in the economy and … return to stability with the aim of alleviating poverty in Zimbabwe,” Kariuki said.