Latest News Editor's Choice

News / National

Ex-coloniser UK flags Zimbabwe as risky

by Staff reporter
18 Aug 2021 at 06:54hrs | Views
THE United Kingdom (UK) has designated Zimbabwe as a risky investment destination owing to high-level corruption, warning its citizens against doing business in the southern African country.

In a report released yesterday, the UK said inflation and currency distortions were making the business environment more uncertain, rendering repatriation of profits a nightmare.

This came at a time when President Emmerson Mnangagwa's administration is making frantic efforts to mend relations with the West and have the sanctions removed.

"Repatriating profits and paying overseas suppliers is cited as the main challenge and exporters to Zimbabwe should engage their customer and/or bank to ensure the risk is mitigated," part of the report read.

"The high volatile inflation also makes the business environment more uncertain," the UK government wrote.

Zimbabwe has been experiencing hyper-inflflation in recent years. Currency distortions have also been cited as a major cause for its deteriorating economic fortunes.

The UK said although the country recorded a bumper harvest in the 2020/21 farming season with a post-COVID-19 recovery expected to bring improvements in the short-term, the long-term remained bleak for the country. "Long-term prospects and indeed investment opportunities remain contingent on addressing deep underlying structural challenges," the report added.

"These challenges include prohibitive and volatile foreign exchange controls, high inflation, fragile property rights and pervasive corruption."

Even though Mnangagwa has declared war on corruption, reports of corrupt deals involving top government officials have been awash in the media over the past months.

The UK said there was high-level corruption in Zimbabwe, especially among the political elite, making the country a high risk investment destination.

"Corruption in Zimbabwe is widespread. Politically-connected individuals are often awarded large State contracts or allocated State-controlled resources such as foreign currency," it said.

The UK also flagged Zimbabwe over the deteriorating human rights situation.

"Zimbabwe has a poor record on human rights; continued abuses have resulted in the placement of targeted sanctions on four security chiefs on February 1 to reflect their role in the most egregious human rights violations (death of six protestors in August 2018 and 17 protestors in Jan 2019) read the note."

Zimbabwe has been looking at being readmitted in the Commonwealth, with Mnangagwa's government claiming it was reforming laws to improve the country's human rights record.

However, killings by the military on Harare streets in August 2018 and January 2019 when Mnangagwa wanted to deflate protests have dented the country's re-engagement efforts.

Source - newsday