HARARE: Australia says Zimbabwe risks losing out on much-needed foreign direct investment especially in the mining sector if it continues to drag its feet on the revision of its indigenisation laws.
Mining has been described by the finance minister Patrick Chinamasa as a “low hanging fruit” that the country could get dividends from once investors venture into the sector.
Foreigners however, want a genuine assurance that their investments, not only in the mining but in all the sectors of the economy, will be safe before they commit themselves.
Such an assurance, they insist, should be shown through the revision of the controversial laws. Government has for a long time been promising to have a re-look at the controversial economic empowerment policy so that it attracts foreign direct investment.
In an interview with NewZimbabwe.com, Australian ambassador to Zimbabwe Suzzane McCourt said the country stands a better chance of attracting investors in mining.
However Zimbabwe risks losing such investment to other nations if it continues showing reluctance in clarifying the laws. “Mining companies are looking at where they can have some certainties in the operating environment.
“They are very conscious that mining in particular and also other sectors is a very competitive global environment; so, for Zimbabwe to be more attractive than other countries to foreign investors it should provide certainty,” said ambassador McCourt.
She said, since arriving in Zimbabwe four months ago, her fellow countrymen have been asking whether Harare has clarified the indigenisation laws. In June, an Australian mining business delegation visited Harare where it met with government and discussed possible investment deals.
“From the messages I get from Australian business people the problem is not on the policy itself; the difficulty is the certainty of them being able to make an investment or commercial decisions based on knowing the rules of the game and having confidence in those rules will stay throughout the duration of their investment,” said the envoy.
“Australia is a very big country in mining and mining investments last for a very long term for example 20 to 30 years. So, Australian businesses need to have certainties so that if they put in a lot of money upfront.” The controversial laws demand that foreigners cede 51 percent shareholding to locals.
