News / Regional
Nhema blocks $1.2 billion investment in Matabeleland South
14 Jan 2013 at 05:16hrs | Views
An international consortium of investors has said it was suspending R10 billion (approximately $1,2 billion) investment in southern Zimbabwe, apparently because of pervasive corruption and demands for bribes by Cabinet ministers.
The announcement came after a rare statement by the consortium, represented by the Cape Town-based businessman Peter Kohler that he had decided not to solve problems by slipping money under the table.
The international investment consortium had raised the cash to establish a huge tourist facility in the arid Matabeleland South, one of the poorest areas of the country boasting of a bird sanctuary and game reserve.
President Robert Mugabe has acknowledged that corruption is a national problem, and curbing official corruption is one of the goals of his tenure if he wins re-election.
At his party's conclave in Gweru last month, Mugabe railed against his officials often used to extort prospective investors, and said the problem had been brought to his attention by former South Africa president Thabo Mbeki.
Beyond embarrassing Mugabe's administration, the international consortium's stance could mark an economic turning point if it leads to more foreign businesses speaking out against corruption here.
The decision is particularly damning for Zimbabwe as the consortium, which declined to be named, runs businesses in dozens of countries around the world and is hardly thin-skinned when it comes to dealing with bureaucracies.
Simon Spooner, a spokesperson for the consortium, said they had decided to keep the matter under wraps hoping to rescue the R10 billion deal that could have immensely benefited Matabeleland South.
According to Spooner, the project would have created 10 000 jobs and provided huge infrastructural development for the local people; electricity, new villages, feedlots, irrigation, an international airport, power station and a large number of exclusive lodges and a 400 unit condominium complex on the Shashe River.
It was based on four memorandum of understandings (MoUs) with the local people and communities of Matshatshuta, Hwali and Tuli Circle and the National Parks, hence the consent of Environment and Natural Resources minister Francis Nhema was required.
"Things stumbled along and it would seem that underhand dealings were demanded," Spooner said.
The talks were said to have involved Home Affairs minister Kembo Mohadi and Zapu president Dumiso Dabengwa, an ex-minister of Home Affairs, to persuade Nhema to get the money invested ahead of the November 2012 deadline.
Mohadi was unreachable for comment yesterday.
But Dabengwa said he had advised the investor where to go and did not get involved beyond that.
"I advised him how to go about it," Dabengwa told the Daily News on Sunday yesterday.
"I don't know how far he had gone. But it was certainly a huge project. It was also going to open a short cut to Johannesburg on the Kezi road."
Under the deal, the communities were going to be granted ownership of the whole investment and benefit from about 10 000 jobs.
"From that point on (in 2010), much transpired until finally Nhema put a stop to it by stating, 'If you think that people will be given title, you can forget it'," Spooner said.
"Five MoUs needed to be signed and minister Nhema stood in the way," he said.
"He vehemently objected to title of the infrastructure being given to the four local communities.
"The discussion to unlock the process involved none other than Dabengwa and me at one stage and Mohadi. It was scuppered."
Nhema yesterday insisted he had nothing to do with the deal, which he said should have been handled by the Zimbabwe Investment Authority.
"I don't have anything to do with that. Did he go through the Zimbabwe Investment Centre?
"They are approved there. We deal with policy issues," he told the Daily News on Sunday yesterday.
The consortium cited the unpredictability of administrative processes in Zimbabwe as the basis of the decision to pull out the R10 billion investment.
It is just the latest case of bribe-taking and shakedowns by Zimbabwean officials that had become intolerable.
The consortium's announcement came after exhausting all channels, but took a principled decision not to pay bribes in Zimbabwe.
Foreign executives have complained privately for decades that bribery is an integral part of Zimbabwean business culture, often tolerated or silently rebuffed.
In fact, foreign companies retain legions of lawyers so they can adhere scrupulously to regulations in hopes of avoiding providing an opening for bribe-seeking officials.
Zimbabwe has fared badly on Transparency International's corruption perception index (CPI), ranked 163 in 176 countries polled worldwide, according to the December 5, 2012 CPI.
The corruption has become so endemic that traffic police routinely take cash bribes.
However, it is the next level of official venality, so-called administrative corruption that is most harmful to business and authorities with the power to halt business activity are blatantly demanding bribes, a move that has riled even Mugabe.
The announcement came after a rare statement by the consortium, represented by the Cape Town-based businessman Peter Kohler that he had decided not to solve problems by slipping money under the table.
The international investment consortium had raised the cash to establish a huge tourist facility in the arid Matabeleland South, one of the poorest areas of the country boasting of a bird sanctuary and game reserve.
President Robert Mugabe has acknowledged that corruption is a national problem, and curbing official corruption is one of the goals of his tenure if he wins re-election.
At his party's conclave in Gweru last month, Mugabe railed against his officials often used to extort prospective investors, and said the problem had been brought to his attention by former South Africa president Thabo Mbeki.
Beyond embarrassing Mugabe's administration, the international consortium's stance could mark an economic turning point if it leads to more foreign businesses speaking out against corruption here.
The decision is particularly damning for Zimbabwe as the consortium, which declined to be named, runs businesses in dozens of countries around the world and is hardly thin-skinned when it comes to dealing with bureaucracies.
Simon Spooner, a spokesperson for the consortium, said they had decided to keep the matter under wraps hoping to rescue the R10 billion deal that could have immensely benefited Matabeleland South.
According to Spooner, the project would have created 10 000 jobs and provided huge infrastructural development for the local people; electricity, new villages, feedlots, irrigation, an international airport, power station and a large number of exclusive lodges and a 400 unit condominium complex on the Shashe River.
It was based on four memorandum of understandings (MoUs) with the local people and communities of Matshatshuta, Hwali and Tuli Circle and the National Parks, hence the consent of Environment and Natural Resources minister Francis Nhema was required.
"Things stumbled along and it would seem that underhand dealings were demanded," Spooner said.
The talks were said to have involved Home Affairs minister Kembo Mohadi and Zapu president Dumiso Dabengwa, an ex-minister of Home Affairs, to persuade Nhema to get the money invested ahead of the November 2012 deadline.
Mohadi was unreachable for comment yesterday.
But Dabengwa said he had advised the investor where to go and did not get involved beyond that.
"I advised him how to go about it," Dabengwa told the Daily News on Sunday yesterday.
"I don't know how far he had gone. But it was certainly a huge project. It was also going to open a short cut to Johannesburg on the Kezi road."
"From that point on (in 2010), much transpired until finally Nhema put a stop to it by stating, 'If you think that people will be given title, you can forget it'," Spooner said.
"Five MoUs needed to be signed and minister Nhema stood in the way," he said.
"He vehemently objected to title of the infrastructure being given to the four local communities.
"The discussion to unlock the process involved none other than Dabengwa and me at one stage and Mohadi. It was scuppered."
Nhema yesterday insisted he had nothing to do with the deal, which he said should have been handled by the Zimbabwe Investment Authority.
"I don't have anything to do with that. Did he go through the Zimbabwe Investment Centre?
"They are approved there. We deal with policy issues," he told the Daily News on Sunday yesterday.
The consortium cited the unpredictability of administrative processes in Zimbabwe as the basis of the decision to pull out the R10 billion investment.
It is just the latest case of bribe-taking and shakedowns by Zimbabwean officials that had become intolerable.
The consortium's announcement came after exhausting all channels, but took a principled decision not to pay bribes in Zimbabwe.
Foreign executives have complained privately for decades that bribery is an integral part of Zimbabwean business culture, often tolerated or silently rebuffed.
In fact, foreign companies retain legions of lawyers so they can adhere scrupulously to regulations in hopes of avoiding providing an opening for bribe-seeking officials.
Zimbabwe has fared badly on Transparency International's corruption perception index (CPI), ranked 163 in 176 countries polled worldwide, according to the December 5, 2012 CPI.
The corruption has become so endemic that traffic police routinely take cash bribes.
However, it is the next level of official venality, so-called administrative corruption that is most harmful to business and authorities with the power to halt business activity are blatantly demanding bribes, a move that has riled even Mugabe.
Source - news
