Zimbabwe’s new government, which unnveiled a $5 billion budget for 2018 last Thursday, says it is capable of reviving the country’s moribund economy as long as the nation can rein in corruption, hold a credible election and implement investor-friendly laws.
Presenting the budget, Minister of Finance Patrick Chinamasa said reviving Zimbabwe’s economy would not be easy. The government must take steps to restore confidence in Zimbabwe’s public finances and institutions, he told parliament.
“We need to address the issue of international re-engagement, corruption and indiscipline, we need an investor-friendly business environment, and finally we need to ensure credibility in the conduct of the 2018 elections,” he said.
Chinamasa said revising the “indigenization” law would be one way to bring back foreign investment. The law, which requires Zimbabweans to hold a majority stake in any business, is blamed for driving away potential investors.
Independent economic analyst John Robertson said he thought the law should be repealed.
“We could have had a considerable amount of investment, but for the existence of that act,” he said. “I believe the attempt to impose it was an attempt to legalize the theft of assets of companies, and the warning that anybody trying to start a new company would face the same penalty has been more than enough to stop anybody coming to the country with new investment funds. So the removal of the act is what we are now hoping for.”
The law is still on the books. But in naming his cabinet last week, President Emmerson Mnangagwa dropped the Indigenization Ministry, which was in charge of enforcing the policy.
On Thursday, Chinamasa said the law, which former President Robert Mugabe said was meant to address colonial-era imbalances, would now apply only to diamond and platinum extraction.