Help Zimbabwe or expect more refugees, Chinamasa tells SA

FINANCE Minister Patrick Chinamasa chose to be blunt Friday as he appealed for investment in South Africa, telling Pretoria it had to help its stricken northern neighbour or expect a new flood of economic refugees.

Millions of Zimbabweans left the country in the decade after 2000 to escape a biting economic crisis which saw inflation officially peak at 231 million percent in 2008 before the government stopped counting.

Most of those who left settled in South Africa. There, they added to the huge numbers of immigrants from the region, leading to tensions and xenophobic clashes as locals seethed at the impact of the new arrivals on jobs, housing and other social services.

The exact number of Zimbabweans now resident in South Africa remains unclear with unofficial estimates putting the figure at more than a million, most living there illegally.

Some 250,000 managed to regularise their stay through a government scheme which was extended this year to 2017 with Pretoria admitting dire economic conditions in Zimbabwe meant they could not be forced to return.

But Chinamasa said South Africans should prepare to take in more of his compatriots if it does not help revive Zimbabwe's faltering economy.

The finance minister was addressing investors at a breakfast briefing held in Johannesburg. The meeting was also attended by cabinet colleagues who included Jonathan Moyo, Mike Bimha and Simbarashe Mumbengegwi as well as central bank governor John Mangudya.

Said Chinamasa: "I believe South African investors have a moral and business obligation to invest in Zimbabwe, or we will continue bothering you. It's in your interest."

South Africa, one of Africa's biggest economies, had to share its success, the minister said.

"We should have the same level of prosperity."

The worst is over

Critics however, blame Chinamasa's principal, President Robert Mugabe for Zimbabwe's economic problems while the veteran leader, now aged 90 and still keen on ruling for a wee bit longer, denies culpability and points accusing fingers at Europe and the United States.

The country's decade-long economic crisis abated somewhat with the formation of a coalition government between Mugabe and his rivals after violent elections in 2008.

But Mugabe reclaimed sole charge with a thundering poll victory in 2013 which was rejected as fraudulent by the opposition.

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Independent analysts say the economy was equally unimpressed with capital taking flight while the government has struggled to attract new investment or funding for its ambitious economic blueprint.

Still, Chinamasa was upbeat telling the Johannesburg gathering that the "worst was over. We are now very much politically stable."

"We are a giant waking up; we are out of the trenches. We are not a basket case."

"Zimbabwe is open for investment and the opportunities are enormous," he added.

But investors remain sceptical, especially about Harare's commitment to respecting property rights. They are also spooked by the country's controversial indigenisation programme under which foreign companies must hand over 51 percent of their businesses to locals.

Opposition legislator and economic commentator Eddie Cross said to attract investment, Zimbabwe must guarantee property rights and scrap the indigenisation law.

Investors not convinced

"We have to guarantee that never again will we allow property rights … and contract law to be violated the way it has in the past two decades," Cross wrote in a recent article.

He added: "The (other) priority is to scrap indigenisation.

"I have always said that no company, from anywhere in the world, would tolerate a situation where they are required by law, to hand over 51 per cent of their shares and with that full management control to people whom they do not even know.

"It's all very well saying the law is ‘misunderstood' but you are dealing with a regime that has just stolen US$30 billion in assets from thousands of local businesses without compensation and that is what the indigenisation Act and its attendant regulations say."

Chinamasa said the government was committed to respecting property rights but ruled out scrapping the indigenisation programme.

"Apart from the land reform - of course a political issue that sought to address socio-economic imbalances - we never infringed property rights, and we do not intend to do that."

Regarding indigenisation, the treasury chief said government had failed to communicate the law clearly. The administration was now working at making it a "clear, consistent and predictable policy".

"I think we are at a different point than when we started," he said.

"The law is sound, but as government, we have been bad in terms of communication. There is no one-size-fits-all. Sooner than later we should be able to clarify on a sector-by-sector basis."