The Financial Gazette

Dumisani Ndlela, Staff Reporter

A RECENT spate of farm invasions targeting properties protected by bilateral investment protection ag-reements has vindicated critics of the Zimbabwe government and thrown the country’s bid to lure foreign investment into turmoil.

It has also shaken the corridors of power in South Africa, where investors were on the verge of pouring over a billion dollars into the country in investment and special packages in the form of credit guarantees for Zimbabwean companies, denied credit line for over a decade because of a high sovereign risk associated with the country.
Sources indicated that South Africa’s ambassador in Zimbabwe, Mlungisi Makalima, had already been instructed to intervene to save South African farmers caught up in the fresh wave of farm occupations.
This was after an activist civil rights group, AfriFo-rum, had asked Trade and Industry Minister, Rob Davies to intervene urgently to protect the lives and property of a South African citizen, Ray Finaughty, and his family in Zimbabwe.
Critics had raised doubts over Zimbabwe’s commitment to a Bilateral Invest-ment Promotion and Prot-ection Agreement (BIPPA) signed with South Africa after almost a decade of negotiations.
The Zimbabwe government had dismissed its critics, with Investment and Economic Planning Minis-ter, Elton Mangoma, saying they should not be judged by past performance. The inclusive government, acc-ording to Mangoma, had opened a new chapter and would maintain a clean record.
Zimbabwe, said Ma-ngoma, was ready for business, and analysts said this would have to be predicated upon respect for private property rights.
But sceptics had expr-essed doubt, insisting Zim-babwe remained unc-ommitted to any of the pacts it had signed, including the recent one with South Africa.
The BIPPA with South Africa was meant to promote and protect cross border investments by citizens and the corporate sector from the two countries.
Although the agreement is bilateral in nature, the spotlight remained on Zimbabwe, over which concerns were raised over the violation of property rights under the country’s agrarian reforms. While admitting that the deal with South Africa was significant, Deon Theron, the Commercial Farmers’ Union president, said their enthusiasm was qualified: the country had wilfully violated other bilateral investment protection deals signed with other countries during its controversial land reform progra-mme and, as farmers, they were still interested in finding out if Zim-babwe would ad-here to the agr-eement.
Interestingly, Theron was the one to pass news that the BIPPA with South Africa had come under test: Ray Finaughty, a South African citizen, was forced off his farm in Rusape under a fresh wave of farm invasions.
Finaughty’s farm is protected under the BIPPA signed with South Africa, as well as a Sou-thern African De-velopment Community Tri-bunal ruling that the land grabs we-re unlawful and that the Zimbabw-ean government should protect co-mmercial farmers who remained on land.
Two more farms were said to have been invaded, including one owned by a Dutch and Malaysian company and is also protected through a BIPPA.
Analysts said the recent spate of invasions is likely to hurt efforts to turn around the country’s recovering ec-onomy, which was earmarked to receive a windfall from neighbour South Afr-ica on the basis of the recent BIPPA deal.
South Africa was expected to inject massive cash into Zimbabwe’s mining, manufacturing and agricultural sectors as a result of the BIPPA, and was also expected to play a key role in projects likely to be undertaken to reconstruct Zimbabwe’s dilapidated infrastructure.
The Financial Gazette understands that there was also a commitment from South Africa to help restore Zimbabwe’s solvency; the country has defaulted on its offshore loan repayment obligations and has outstanding arrears running into billions of United States dollars.
Indications were that South Africa could avail substantial amounts of cash in credit lines to support Zimbabwe’s frail fiscus, while at the same time restoring credit facilities to Zimbabwe’s struggling companies which had suffered due to a high sovereign risk.

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