President Emmerson Mnangagwa this week launched investment blueprint for Zimbabwe during the Tokyo International Conference on African Development which is underway in Japan. Under the neo-liberal document, Zimbabwe promised to stop policy inconsistency, respect property rights, protect and promote foreign direct investments among other issues.
According to the new document, the new policy is a departure from the Dependency Theory centred approach where the role of developing countries is to provide raw materials for developed countries and serve as a market for the industrialised nations. This ambitious policy document is anchored on improved governance and rule of law, upholding freedoms of expression and association, political and economic reforms with the international community and fighting corruption both within the public and private sectors.
The launch of the investment policy also coincided with the commissioning of the Zimbabwe Investment Development Agency which seeks to improve the country’s ease of doing business. It is our hope that this agency will turn the MOUs signed in Japan into actual deals.
For Zimbabwe, the proof of the pudding is in the eating. Key issues addressed in the National Investment Policy are all covered by the Transitional Stabilisation Programme (2018-2020) which is the country’s main developmental plan. Zimbabwe’s record of implementing well-thought out policy has been appalling, specifically on political reforms.
In 2016, Japan promised to increase its investment in Africa but at current levels has not fully committed to its pledges. Official figures show that China and India are the leading Asian countries that have increased investments in emerging countries. Zimbabwe’s efforts in attracting foreign direct investment from Japan and the rest of the world should go beyond rhetoric. The TICAD conference comes at a time Zimbabwe has been criticised by the European Union and the United States for growing human rights violations on dissenting voices. Government has denied any violations despite media reports.
Official statistics from the Embassy of Japan show that only two companies from the East Asian island country are now operating in the country from a peak of 40. The two are; Kansai Plascon which acquired former Zimbabwe Stock Exchange listed manufacturing concern Astra and Toyota Zimbabwe. The divestment of Japanese companies in Zimbabwe speaks to housekeeping issues in Zimbabwe.
Hyperinflation in 2008 coupled with challenges in repatriating foreign currency, uncertainty, Indigenisation Policy among other economic challenges had unnerved investors from Japan.
Zimbabwe ditched its local currency for a basket of foreign currencies mainly dominated by the United States dollar in 2009 due to runaway inflation.
In 10 years the country reintroduced its domestic currency at a time inflation had reached triple-digit figures. The reintroduction of the local currency was not consistent with the TSP which spelt out that the multicurrency system would be maintained. These are some the issues that investors fret over.
The economy of Japan is a highly developed and market-oriented economy. It is the third-largest in the world by nominal GDP and the fourth-largest by purchasing power parity and is the world's second largest developed economy.
By improving its international relations with Japan, Zimbabwe could also win allies in convincing the G7 countries to extend a loan to Harare to settle arrears to the World Bank. Currently France is taking a leading position on this front.