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Zimbabwe faces a clear challenge of dealing with two key issues, the failure to deal effectively with corruption and policy inconsistency on major programmes, which have undermined its effort in attracting investment.

This failure has contributed to the country’s failure to obtain the required investment levels from both the Zimbabwean and foreign investors.

The fight against corruption and policy inconsistency in major programmes such as indigenisation are critical in establishing a conducive environment to attract investors.

They enable investors to invest their hard earned money or lifetime savings with peace of mind.

People are averse to invest in a place where they think or just perceive that their money might be lost through corruption or conflicting policy positions.

It is doubtful that an investor with many choices around the world will come to invest in Zimbabwe mainly for altruistic reasons. Investors are moved primarily by profits not altruism. Zimbabwe has to demonstrate to investors why they should choose it over other countries.

The Government has created many excellent economic development plans, but they have failed to produce the expected levels of investment that will sustain robust growth because of the underlying unresolved issues of corruption and policy inconsistency.

Government needs to take a programme approach in dealing with these two and other issues, whose timeframe can range up to 18 months, so that it develops a plan, commit sufficient resources and measure the outcomes.

Understandably, Government has immediate investment needs which force them to focus resources in other areas. But dealing with fundamental issues can have its own immediate returns, as well, regardless of the time-frame.

The markets and investors can reward the country with positive sentiment and investment relative to progress made within the 18 months based on certain decisions or actions the Government takes.

This approach is similar to a bank providing a loan to an individual based on the soundness of a business idea. Banks would not stop loaning money to an entrepreneur they view as heading in the right direction only because heshe has not satisfied all the business’ stated objectives. This principle applies in different facets of life.

The failure to deal with these problems is dangerous for the economy because they will turn structural, if they have not, as yet. This means that corruption and policy inconsistency will become standing features of the country’s governance system. Current citizens and future generations will internalise these features and regard them as part of the informal governance system. Future leaders might internalise a system that operates under the premise that investors have to pay a bribe to be licensed.

The media have already reported such misdemeanours.

We need to condemn corruption and policy inconsistency with the utmost vigour while creating a governance system and investment climate based on a positive value system.

Zimbabwe’s economic development plans and general public conduct need to be driven by values such as integrity, accountability, stewardship, excellence, etc.

Developing and entrenching these values will not happen on its own as recent evidence of reported cases of corruption and policy inconsistency demonstrates.

Government needs to take the lead in implementing a programme aimed at establishing a conducive environment. The programme will be implemented concurrently with the investment drive. The key issue here is that the effort to establish a conducive environment is not only acknowledged in a document or discussions, but Government actually invests adequate resources and lays out a specific plan of how it will achieve tangible and measurable outcomes.

This effort will not solve all the problems of Zimbabwe, but will make investors see or even believe that the Government is serious about creating a conducive environment. In that case, investors, both Zimbabwean and foreign can entrust their money to the country.

As indicated above, for Government to successfully convince investors, it will need to not only totally eradicate corruption or policy inconsistencies, but show incremental progress as it implements its plan.

Likewise, the investors and markets will respond by rewarding the country accordingly. No doubt those investors have a lot that they require from Zimbabwe, but that does not mean they will come here regardless of the environment.

However, they are keen to jump in as soon as a conducive environment is put in place.

Indeed, economic sanctions play a role in the obtaining economic challenges, but on the flip side there are other opportunities that we can tap into since we are not subject to total embargo. Besides, even those countries that applied economic sanctions are keen to invest in Zimbabwe if some of these recurring challenges such as policy inconsistency and corruption are addressed.

With all the challenges facing the nation, Zimbabweans must understand that only with a conducive environment can the country attract investment that leads to sustained economic growth.

Source : The Herald

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