Zimbabwean Roulette

The Zimbabwe government has been chasing away investors, both foreign and local. Investing in Zimbabwe, has become a very dangerous gamble simply because of government actions unpredictability.

When stranded for cash, the Zanu-PF led government has not hesitated to act outside the law to effect quick grabs of cash and assets. They do not seem to care about the long term consequences of such abrupt and illegal actions.

That has made investing in Zimbabwe worse than playing Russian roulette using a six-gun with five loaded chambers!

If you put your money and assets in there, you never know when the Zimbabwe government will get so desperate for cash that they will make a grab for your assets.

Some people have called this policy unpredictability. These actions have nothing to do with policy but the notion rife among government officials that they must 'benefit' from the exercise of power. This boils down to grabbing any cash and assets they can.

Most of the time this simmers on as low-level misuse of government property. Actions such as using government workers, materials and machinery to build private buildings are common. Misuse of government fuel in private vehicles and farming operations is rampant.

Now this is frequently boiling over to the grabbing of private assets. This happens when government coffers run but there is a desperate need for cash.

Cases in point, among many, include the taking of money from FCAs (foreign currency accounts) during the heydays of inflation. Add to that during the price controls days big supermarket chains like Makro and Jaggers had their shelves emptied of goods, ostensibly for overpricing, only for the same goods to end up on the more exorbitant black market, pilfered by government officials.

The most recent case is the sudden grab of assets from diamond mines in Chiadzwa. The government told mining companies to leave immediately, leaving all assets such as bulldozers, excavators, trucks and other machinery behind. It seems the Zanu-PF government intend to take this machinery it does not own and continue to mine themselves. According to some accounts, officials were even demanding keys to safes and vaults.

To me that amounts to using government authority to steal the private assets of miners. Fine the land based claims belong to Zimbabwe but why not let the miners take their bulldozers and machines? Why force them to leave their assets unsecured?

I know some would want me to include land on the list of assets illegally grabbed by the government of Zimbabwe. However it is important to remember that a war was fought by the people of Zimbabwe whose main objective was to recover land stolen by the British and handed over to the queen's subjects on racial grounds. The current government by and large have misused that objective, but I would be lying to the world if I claimed the people of Zimbabwe do not care about their land.

Everyone also knows that it is difficult if not impossible to do big business in Zimbabwe without regularly 'donating' to Zanu-PF functions. That is why events like Mugabe's birthday always manage to raise hundreds of thousands dollars. It is basically a shakedown to make people pay protection money for them not to be harassed by the Zanu-PF controlled state organs. If you are thinking mafia you are on the right track. Rambai makashinga with what you are thinking.

Often the cash is grabbed for useless things such as funding Mugabe's never ending trips outside the country. In 2015 alone he set foot in foreign countries more than 52 times, an evarage of more than a trip a week. Where does he expect a non-functional economy to get the cash for all that extravagance.

Their rhetoric and actions suggest that Zanu-PF is not even considering trimming down government size and expenditure to a size that is manageable for the severely shrunken economy. The reason is simple. Nobody wants to loose the 'benefits' of skimming government money into private pockets.

Some like Amos Midzi reportedly committed suicide over the issue of loss of these corruption 'benefits'. He had been kicked out over the ferocious Mugabe succession fight that is ongoing in Zanu-PF.

People kicked out over succession fights are promptly replaced with other benefit grabbers, keeping the gravy train bursting at the seams. Consequently the overburdened revenue streams are not given room to breathe, meaning that the need to grab cash from other sources including private assets is likely to keep growing.

Fewer and fewer investors are willing to risk their capital in this environment. Those who do are usually looking for very quick returns, and are likely to use any means necessary including tax evasion and revenue concealment to maximise profits.

They are also unlikely to invest in long term infrastructure. For example not a single additional road was paved in Chiadzwa. Even the highway passing near the diamond area has not been maintained let alone upgraded. Yet airstrips to fly out diamonds were quickly constructed.