Industry minister Mike Bimha says the lifting of sanctions by the European Union has broadened the scope for local industry to do business with the bloc and access to foreign investment.
The EU lifted its 12-year suspension of direct financial aid to the government of Zimbabwe at the end of October, imposed after allegations of rights abuses by President Robert Mugabe’s administration, citing improvements in the political environment after the adoption of a new constitution and peaceful, if disputed polls, last year.
Mugabe and his wife are the only ones still subject to a travel ban, while a state-owned arms firm is also under an arms embargo.
Bimha said today that the EU move was a major step towards the normalisation of ties, and would arrest the ‘alarming’ decline of the local industry since 2011.
Official statistics show that over 4 600 companies have closed shop between 2011 and October this year, with nearly 64 000 workers losing their jobs, a trend Bimha said could be reversed with more trade expected with the EU.
Local firms have suffered from lack of long-term financing to replace ageing machinery seen as one of the main reasons that has made the manufacturing sector uncompetitive and reengagement with the EU broadens the investor base, Bimha said.
“I expect things to get better (from next year) because of the change of position by European Union as far as sanctions are concerned. It would be easy for our companies to partner or do business with companies in Europe,” said Bimha.
“Also there are some engagements that the minister of finance has had with other countries and I believe they will come into fruition next year.”
Government has also tweaked its controversial empowerment policy forcing foreign owned companies to sell controlling stakes to locals, saying it will be dealt with on a case-by-case basis through line ministries and that the 51/49 mix will remain an aspiration but not cast in stone.
Zimbabwe signed an interim Economic Partnership Agreement (EPA) with the EU in March 2012 which gave it 100 percent duty free-quota, free access into the EU market and is in discussions for a comprehensive EPA to replace the old Cotonou Agreement trade preferences.
Also, the bloc will from next year, start a 234 million Euro ($300 million) five-year funding programme to support health, agriculture and governance initiatives.- The Source
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