SWISS and British diplomats have implored President Robert Mugabe’s government to improve the country’s investment climate, saying the current environment was not attractive to investors.
Ruth Huber, Switzerland’s ambassador to Zimbabwe, told the Financial Gazette that investor confidence in the country was very low, a situation that had hindered investment into Zimbabwe from Swiss companies.
Swiss owned companies operating in Zimbabwe include Bata, Lafarge and Nestle.
“I would be happy to promote Zimbabwe but as we know the investor confidence is not very high and we hope for an improvement so that we can promote Zimbabwe as a country for international investment,” she said.
British ambassador, Catriona Laing, said poor perception was undermining Zimbabwe as an investment destination.
“The reason investors are not coming in the way we would like to see them in Zimbabwe is because there is a high political risk premium. There is a feeling of political uncertainty here and the business environment frankly is not very conducive to investments, either domestic or international,” she said.
Zimbabwe is on an economic descent blamed largely on fiscal mismanagement and poor policies, some of which have discouraged foreign direct investment (FDI).
FDI figures in the country are now only a fraction of what neighbouring countries are receiving. Zimbabwe recorded FDI worth US$421 million in 2015, while Mozambique and Zambia received US$3,7 billion and US$1,6 billion worth of FDI in the same year.
In 2016, FDI into Zimbabwe fell by 30 percent to US$294,66 million, reflecting the worsening investor sentiment at a time government had set a long term target of at least US$1 billion a year.
Huber said Zimbabwe needed to improve on respect for property rights, governance and respect for human rights and democratic principles.
“The crucial elements are the rule of law, to know exactly what the conditions are, what costs are involved and issues related to indigenisation.
“Indigenisation laws exist in other countries as well but the framework needs to be clear and stable so that international companies know what to expect,” she said.