The European Union (EU) says Zimbabwe needs to refine its business environment which continues to deter potential investors from the bloc’s member states.
EU ambassador to Zimbabwe Philippe Van Damme said this at the inauguration of the Zimbabwe – EU Business information centre (Zim-EBIC) in Bulawayo yesterday.
Van Damme said Zimbabwe is an over protected economy with some of the highest tariffs in the world which affected competitiveness.
However, the ambassador said as a diplomat, his role was not to assess where a country stood in terms of attractiveness but investors made their own decisions and the volume of FDI was the best measure.
“At the same time, by lowering tariffs you take away vested interests because the more complicated the customs and tariff structure is, the higher the incentive to smuggle goods and circumvent the law,” he added.
He said the same rigid policies were affecting the many investors who were interested in doing business with the nation.
“We have seen a lot of trade missions coming through to Zimbabwe in recent months, UK, France, Germany, Denmark and many others and they all confirm the county’s potential like above average human capital, sector development and a central location but they all say they have the impression that there is not enough legal security in terms of investment,” he added.
Van Damme singled out indigenisation and empowerment, land tenure and respect of the rule of law as major areas which were usually cited to required formal clarification by potential investors.
“It’s up to them to assess how to evaluate those risks because Zimbabwe is competing with the rest of the world to attract foreign investment.
“If you have similar opportunities but with less political risk in a neighbouring country, foreign investors will go to the neighbouring country. Capital is mobile.”
In his speech during the launch, Van Damme said the EU was very open to working with Zimbabwe.
“We have high quality standards, safety regulations, sanitary and phyto-sanitary norms. These are not protectionist measures in disguise but market driven requirements to protect the European consumers,” he added.
The diplomat went to indicate that there were many Zimbabwean examples of companies that met the set norms and standards and penetrated the bloc.
“And once you penetrate the EU market, this becomes a quality label for the rest of the world as the EU is an entry point to the whole world.”
Van Damme also said the EU will soon sign a one million Euro regional integration support fund to support ministries of industry and information communication technology.
“We have already started planning for the identification of a larger 7 million Euro trade facilitation programme under the 11th European Development Fund regional indicative programme,” he said.
Van Damme said the new programme will assist government to update its private sector and trade policies and contribute to further regional integration.
“This will require a lot of coordination, a lot of policy dialogue, but let’s not lose hope. Let’s try it, let’s get organised, take up challenges, others have done it, you can do it, yes we can.”- The Source