As Botswana prepares to take advantage of rebuilding the ruined Zimbabwe economy that is in an abyss by committing to underwrite bank loans, the country’s employer confederation has warned that investment safeguards should be finalised.
BOCCIM—the Botswana Confederation of Commerce Industry and Manpower–said this week that it supports the government’s initiative to support the Short Term Economic Recovery Programme (STERP).
“BOCCIM is of the view that Botswana will need to fast track the finalisation of the Investment Protection Agreement to secure investments in Zimbabwe and to provide the potential investors with the confidence to do business there,” the employer federation said.
The comments, by the Maria Machailo-Ellis led organisation, come after the revelation that Botswana had committed to guarantee P500 million from local financial institutions for business dealings with Zimbabwe industry in a country described as being in a state of ‘contingent liability’.
The credit line is a sequel to the extraordinary summit of SADC Heads of States that met in Swaziland in March 2009 to discuss the funding model to help Zimbabwe.
“There may also be a need to revisit the various bilateral trade agreements with Zimbabwe to ensure that they are used effectively to facilitate trade between the two countries,” it added.
Zimbabwe has draconian empowerment laws, like the Indigenisation and Economic Empowerment Act, that came at the height of farm seizures and massive capital flight from investors who have put money into Zimbabwe.
The law was meant to transfer 50 percent of business to Zimbabweans who were said to have been disadvantaged, and giving black Zimbabweans the right to take control of foreign entities.
Meanwhile, BOCCIM, which is expected to lead a mission to Zimbabwe next week, said the credit line will facilitate the growth of enterprises between the two countries.
Next month, BOCCIM will be inviting its members on a mission to Zimbabwe to assess opportunities since the credit line will help in the purchase of goods and services from Botswana, where feasible.
“The mission will give the Botswana private sector an opportunity to scan the business environment in Zimbabwe first hand and to participate and to appreciate any risks as well as to build contacts for future relationships,” BOCCIM noted.
The organisation is making friends with peers like Employers Confederation of Zimbabwe (EMCOZ), Confederation of Zimbabwe Industries (CZI), Zimbabwe National Chamber of Commerce (ZNCC) and others, through the Business Council of Zimbabwe to prepare for the mission.
Last week, one official said that on their recent fact-finding mission in Zimbabwe, where they met with the Zimbabwe Business Council, BEDIA and other government agencies were told that most of the industry equipment was lying idle, while the lack of working capital was cited by Zimbabwean companies as a current challenge.