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President Robert Mugabe’s government has sacked the board of the Zimbabwe Investment Authority accusing it of failing to attract meaningful foreign direct investment to the country in 2016, it emerged.
Obert Mpofu, the macro-economic planning and investment promotion minister who is in charge of a failed investment campaign known as Rapid Results recently announced a new board dominated by officials from the Office of the President and Cabinet (OPC) to replace the one led by failed Kingdom banker Nigel Chanakira. The new board is chaired by former CBZ Holdings chairman Richard Victor Wilde.
Under Chanakira, a Mugabe relative, Zimbabwe attracted a paltry $421 million in foreign direct investment in 2016 compared to $545 million in 2015, according to the United Nations trade organisation Unctad. Zimbabwe was ranked 161 out of 189 countries and was surpassed by neighbouring Zambia and Mozambique, which received $2 billion and $5 billion in foreign investment money in the same period.
The dwindling investment figures are blamed on Mugabe’s alleged rigging of the 2013 elections, discredited ‘command’ economic policies, mismanagement and corruption. An estimated $2.8 billion was taken out of the economy when Mugabe was declared the winner of the 2013 election amid allegations of rigging by the opposition and Western countries which were typically barred from monitoring the polls. The despot has taken the opportunity to stuff the investment office, one of the last cash cows in the crumbling economy, with relatives and members of his private army, the Central Intelligence Organisation which operates under the OPC.
The flight of investors comes at a time Zimbabwe is facing budget turmoil. Officials said they wanted investments to rise to $3 billion annually and contribute a quarter of gross domestic product which currently stands at $12 million.
Mugabe’s most senior operatives have failed to change the investment climate and bring in new investors despite the World Bank providing several million dollars for training of the officials. Targets of the so-called Rapid Results Initiative and the Ease of Doing Business programme have not been met. The 100 days set for liberalising investment regulations has expired without any change in the landscape. According to sources, the programme met resistance from officials in the police and immigration departments who could not be persuaded to reduce corruption at roadblocks and harassment of foreigners at entry points and demands for bribes in processing of work permits. Investors also complain that they are forced to partner with locals who are connected to Mugabe and Zanu PF, who are difficult to deal with and often trigger disputes.
Zimbabwe has been trying to woo investors from China and Russia after being deserted by the West but these have complained about the three months it takes to have an investment registered. Zimbabwe investment centre chief executive officer Richard Mbaiwa said the approval period should ideally be reduced to three days.
“We’re punching below our potential. Our levels of investment are not at the level we want as a country. We need to improve the investment coming to our country,” Mbaiwa said. “We’ve been affected by a number of things such as sanctions. The hyperinflationary period also affected the perception of Zimbabwe as an investment destination.”
Analysts dispute this and say the greatest problem is Mugabe’s refusal to give up power at 93 and corruption.
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