Home » Governance » Zimbabwe – Getting Back to Basics [opinion]

LAST week we looked at the need to deal with the demons of our past and the issues of Citizenship. This week we move onto the fundamental foundations for a modern, developing State. What does an investor want to see before committing resources and making an investment in enterprise of any nature?

The first issue is security nobody is going to invest time and money in an environment where security is not guaranteed. Security of assets, security of person and staff this does not mean the simple absence of any threat of violence. It means legal security and a guarantee that no one is going to have the right to interfere with control and management of assets in any form. In Zimbabwe we have violated every aspect of this essential prerequisite – we have physically forced investors off their land or premises, we have used extra-legal means to strip investors of assets and rights, we have taken money from bank accounts without the knowledge or approval of the people who owned the funds in those accounts.

Our indigenisation initiative, no matter how it is dressed up to make it more acceptable, still says that the State has the right to take over control of your investment at any time and without compensation. The farm invasions have deprived nearly 6000 individuals and companies of their assets and the means to make a living – destroying in the process at least half the value of land and fixed assets in the country. In addition, when the media is able to show pictures of gangs of thugs threatening physical violence against individuals and staff who resist eviction, even photos of thugs burning down buildings and the police simply standing by and watching, it sends a clear message to everyone, we are not a safe destination for investment.

Those who appeal for help from the authorities – even seeking support for the enforcement of Court orders or Judgments, simply face a blank wall of “we can do nothing, it’s political”. When the Reserve Bank, using its pre-emptive right to buy gold at a market price, does so and then does not pay the producers or delays payment until inflation has destroyed its value, do we need to explain to anyone why investors will not invest in mining activity where they have no control over the sale of the final product. Then there is the enforcement and respect for contracts of all kinds. A Mining Claim registered with the Ministry of Mines, is a contract. The purchase of a piece of land or a building under freehold title is a contract. The signatures on a guarantee or a bank facility, is a contract and under a system of law, backed by the Constitution, no one should be free to violate such contracts without State protection and enforcement. You try and enforce such contracts where the other party is politically linked in Zimbabwe and soon you will find out that there is no protection or enforcement of contractual rights in Zimbabwe.

I can recall one incident where a friend of mine was being forced off his farming business in the lowveld. I heard about the pressure he was under and went to see him. I found him virtually barricaded in his home with all sorts of people stripping the farm of its products and assets. I went down to the citrus orchards where an export crop was waiting to be picked and packed for sale in Europe.

The people stripping the farm had a 30 tonne vehicle in the orchard and they were loading it with citrus. I remonstrated with them and they laughed at me. I found a Policeman at the gate and said to him that this was theft. He had a weapon and a clip board he simply turned away from me without comment. Five days later, my friend shot his dogs and left with a suitcase of clothes. He died destitute in Harare some years later.

The rule of law and equality before the law is fundamental to the creation of an environment where we can attract and exploit investment on a large scale. Until this is restored and respected in Zimbabwe, we are going nowhere. The next most fundamental aspect must be infrastructure. Not all investments are self-supporting in all aspects – huge mining investments that bring with them the transport and power investments to support the core business are rare. In Zimbabwe we have a basically sound infrastructure, but we have not maintained or invested in this infrastructure.

Source : New Zimbabwe