Economist John Robertson says that Government should leave building agriculture, mining and manufacturing capacity to the private sector and should concentrate on infrastructural development. He also believes that high taxes are the biggest deterrent to new investment in Zimbabwe. The following are excerpts from an interview he had with Business Weekly.
BW: What would you say is the biggest deterrent to new investment in the country?
JR: Government’s belief that investors should pay a very high price for the privilege of investing in Zimbabwe.
This price adds up to paying separately for licences, permits and registration fees, paying high rates of tax on profits, paying separate taxes on dividends, paying taxes in advance and facing accusations from Zimra that tax obligations are not being met.
After their bank accounts were garnished by Zimra, many companies have been crippled through the loss of working capital, the recovery of which was delayed for too long by Zimra bureaucracy. All this is deters new investment in the country.
BW: What do you think the country can do differently to improve its economic growth outlook?
JR. Growth depends upon investment and investment depends on confidence. As Zimbabwe is now considered to be a very high risk business option for productive investors — those who invest in manufacturing, mining or agriculture — the country is enjoying very little growth.
BW: Do you think as a country our level of education is good enough for us to be innovative?
JR: All over the world, innovative people are quite rare. But innovative ideas are extremely portable. If conditions are not right in the countries where innovative people live, they can too easily take them elsewhere. Zimbabwe has lost many of its innovative people to more attractive economic environments.
BW: Do you think there is enough understanding between Government and the private sector in terms of attracting investment?
JR: The problem here is that investment should not be a contest between the private sector and Government.
Building agriculture, mining and manufacturing capacity should be left entirely to the private sector and Government should concentrate on infrastructural development.
It will need to pay private sector engineering contractors to build roads, railways, power stations, schools, hospitals and water supply facilities, but all these should be designed to help make the activities of the people producing goods, services and exports more efficient and more competitive.
BW: Which areas of investment do you think we are not putting enough effort as a country . . . the low hanging fruits?
JR: Retail activity seems to be the low hanging fruit area, but it is a shallow investment that can disappear quickly. It also does not employ many people and the country has enough retailers anyway.
The real challenge is to make the country an extremely good investment option and then let the investors decide what they can do here. Our message should be: “Whatever you can do, Zimbabwe has been turned into the best place to do it!”
Then let them decide to come. But we have to make the country an attractive place to invest.
Right now, it is not.