Dogged by investment crisis

Zimbabwe’s political problems are taking a heavy economic toll, resulting in a huge drop in investment, both local and foreign, PANA reported on Wednesday. Fence-sitting by investors has been exacerbated by next year’s presidential poll, widely expected to lead to electoral violence that could equal or surpass the experience in the run-up to last year’s parliamentary elections. The state-run Zimbabwe Investment Centre (ZIC) said the number of investment projects submitted for its approval fell by 80 percent last year, and it is expected that the trend would continue this year, if not worsen. “There has been a significant decline in the level of both foreign and local investment projects approved this year,” said ZIC director Richard Mbaiwa. The agency blames the dearth of investment on the international perception of Zimbabwe based on the unstable political environment. This stems from the political violence before and after last year’s polls, the land reform programme and government’s combative stance towards the independent media, judiciary and opposition. The London-based Economist Intelligence Unit (EIU), in its latest rankings of good and bad emerging markets to invest in, said Zimbabwe is only better than Myanmar and Uzbekistan on a list of 93 countries. “It (the EIU report) further damages foreign investor perceptions of our market and would worsen the flight of foreign funds from the country,” PANA quoted a stockbroker, Nyasha Chasakara, as saying. At 60 percent, Zimbabwe has the highest inflation rate in the region. This has been worsened by the shortage of foreign currency, forcing businesses to source it on the parallel market at double the official exchange rate. The Zimbabwe National Chamber of Commerce (ZNCC) said a survey it conducted last year showed a growing number of its members were abandoning plans to invest in their businesses, citing lack of foreign currency, among other factors.