THE United States has said Zimbabwe should create an environment conducive for investment and ensure there is respect for the rule of law, human rights and an end to corruption to attract foreign investors.
The southern African nation is one of the lowly ranked countries on the World Bank Ease of Doing Business rankings. Investors, according to critics, fret over the country’s policy inconsistencies, bureaucratic inertia and broken down infrastructure, among other key factors.
A senior US embassy official said the world’s biggest economy was keen on investing in Zimbabwe as shown by the coming in of several of its companies to explore opportunities.
Aja C. Stefanon, deputy economic chief at the United States embassy in Zimbabwe said this during an online public dialogue forum on foreign investments in Zimbabwe organised by the Information for Development Trust (IDT), a non-profit organisation helping journalists to expose corruption and bad governance, and the Sapes Trust.
“Governments seeking domestic and foreign investment — including from US companies —can increase the attractiveness of their investment climate by pursuing policies characterised by fair, transparent, and predictable conditions for investment,” she said.
“There are several elements that create an enabling environment for foreign direct investment like respect for rule of law and private property rights, effective measures to combat corruption and to ensure government action is guided by rule of law, and the free transfer of funds into and out of the country and exchange of currency, at a market rate of exchange, without delay.”
She said Zimbabwe was failing to combat corruption and deal with laws that give hope to prospective investors.
“Many of the elements that create an attractive investment climate for companies — US companies specifically — remain a challenge for the Zimbabwean government to put in place or enforce,” she said.
“For example, endemic corruption presents a serious challenge to businesses operating in Zimbabwe. Zimbabwe’s scores on governance, transparency, and corruption perception indices are well below the regional average. US firms have identified corruption as an obstacle to FDI [foreign direct investment], with many corruption allegations stemming from opaque procurement processes.”
She said the power of investigative journalism should not be underestimated, adding that the partnership with IDT has proven to be influential in the communities and business world. “We have enjoyed this continuing partnership with the IDT.
In it, we have seen the power of investigative journalism in influencing positive outcomes for both communities and investors,” she said. Farai Maguwu of the Centre for Natural Resources Governance (CNRG), natural resource governance expert Solomon Mungure and The Standard editor Kholwani Nyathi were part of the panelists during the discussion.
Stefanon added: “One embassy priority is to improve engagement between the US private sector and Zimbabwean entrepreneurs to encourage more trade and investment between our countries. The US government recognizes the important role responsible foreign direct investment, or FDI, can play in a country’s sustainable development plans. FDI brings significant benefits by creating high-quality jobs and introducing modern production and management practices.”
“Nevertheless, Zimbabwe continues to receive FDI although the amount has dropped significantly since 2014. We must acknowledge foreign investment does not always bring benefits to the community.”
She said some foreign companies have been accused of taking advantage of low wages and violating human rights and labour rights in countries where governments fail to enforce rights effectively.
“We note the specific concerns communities in Zimbabwe have regarding foreign investments in the extractive sector. Zimbabwe’s mining sector currently lacks safeguards that would ensure benefits for the local community and contribute to the country’s sustainable development,” she said.
“This is why we value our partnerships with Zimbabweans; and supporting the work that IDT does. This work has ensured that media plays its watchdog role in safeguarding shared goals in labour, human rights, and natural resources governance.”