eBusiness Weekly
During the past three months, Zimbabwe has become a centre of attraction as investors from leading global corporates are taking positions with the view of investing in the country. This follows the take-over of power by President Mnangagwa following the resignation of former president Robert Mugabe in November 2017 after military intervention. Business Weekly Senior Reporter Martin Kadzere (BW) talks to Muchadeyi Ashton Masunda (MM), chairman of the Commercial Arbitration Centre to understand from the legal point of view if Zimbabwe’s laws can guarantee protection of investments.
BW — Zimbabwe is in the new dispensation and President Mnangagwa has been consistent since his inauguration that the country is open for business. From a legal perspective, do our laws adequately guarantee protection of foreign investments?
MM — The Roman-Dutch Legal System which has obtained in present day Zimbabwe since the 1890s is a hybrid of the Roman and English Legal Systems. Historically, one can safely argue that Zimbabwe has, in general terms, always had one of the strongest and independent judiciaries amongst developing and developed countries in Africa. The binding and persuasive precedents which have evolved from time immemorial are as good as any which exist in more mature democracies in other parts of the world.
Since the early 1900s, our country has been endowed with solid business and professional institutions such as the Zimbabwe Stock Exchange, Law Society of Zimbabwe, Institute of Chartered Accountants of Zimbabwe as well as Chamber of Mines of Zimbabwe.
Our financial services sector is among the most modern and sophisticated in the world. Following the new dispensation, which ushered in President Emmerson Dambudzo Mnangagwa’s administration in November 2017, all the right sentiments have been expressed in various fora such as the World Economic Forum in Davos, Switzerland; the Mining Indaba in Cape Town, South Africa and, more recently, the Zimbabwe Mining Investment Conference in Harare. However, we have yet to see the political rhetoric being translated into tangible action like the long overdue overhaul of a number of retrogressive provisions of, for instance, the indigenisation legislation. In terms of a legal perspective, the framework which is currently in place is more than adequate to guarantee the protection of foreign investments.
BW — It is quite evident that investor confidence is creeping back. Does this reflect the general sentiment among the investor community that Mnangagwa is a serious constitutionalist or a reformist, having been part of the previous administration accused of disrespecting the rule of law and violating property rights?
MM — The jury is still out to establish whether or not President Mnangagwa will turn out to be seriously committed to the restoration of constitutionalism in Zimbabwe. The fact that he has been an integral part of the previous administration since the advent of Uhuru in April 1980 is definitely hanging around his neck like the proverbial albatross. The ball is in his court to prove the doubting Thomases wrong.
So far he and a number of key members of his team seem quite determined to get Zimbabwe back on track in the eyes of the SADC, Africa Union, European Union, the British Commonwealth of Nations and UN with particular regard to the need for our beloved and yet beleaguered country to hold free, fair and credible elections.
BW — What are your views about the integrity of Zimbabwe’s judicial system? Are the existing judicial structures good enough to give confidence to the prospective investors?
MM — The quality of our country’s judicial system is good enough to give confidence to both existing and prospective investors. Chief Justice Luke Malaba has been a breath of fresh air during his first 12 months as the Head of the Judiciary, which is a critical part of the four hallowed pillars of governance in any vibrant democracy — the others being the Executive, Legislature and the proverbial Fourth Estate, the media.
Chief Justice Malaba has already set in motion steps to establish the Commercial Division of the High Court of Zimbabwe whose main responsibility will be the expeditious resolution of disputes of a commercial nature. The role of the Commercial Division of the High Court will be complemented by the Commercial Arbitration Centre which has been the driving force behind the alternative dispute resolution culture in Zimbabwe since July 1995. In this latter regard, Zimbabwe is streets ahead of a number of developing and some developed countries in that we have the Arbitration Act of 1996 which is based on the UNCITRAL (United Nations Commission on International Trade Law) Model Law and a signatory to the 1958 New York Convention since September 1994. This Convention facilitates the reciprocal recognition and enforcement of foreign arbitral awards which gives foreign investors a considerable measure of comfort.
Zimbabwe has also been a signatory to the 1965 Washington Convention since September 1994. This convention is also known as the ICSID Convention (International Convention for the Settlement of Investment Disputes). This Convention makes it possible for any aggrieved foreign investor to refer a dispute to the International Centre for the Settlement of Investment Disputes in Washington DC in the USA and had a functional alternative dispute resolution centre since July 1995.
BW — Do you think our judicial system is free from political interference?
MM — Our judicial system is, by and large, independent. However, we should not delude ourselves into thinking that our judicial system has been entirely free from political interference pre and post April 1980. In this latter regard, Zimbabwe is not an exception to what obtains in other jurisdictions of developing and developed countries. The vexed question of judicial independence is ongoing work in progress and is inextricably intertwined with the calibre and integrity of the judiciary at any given moment. I hasten to welcome the EU’s recent injection of funds to the tune of €14 million to be spread across critical stakeholders such as the Judicial Service Commission, Law Society of Zimbabwe and Legal Resources Foundation in the dispensation of the justice sector.
BW — Do you see the new dispensation respecting property rights going forward given that we previously had bad experiences where some bilateral agreements were violated?
MM — Regrettably, over the years, our country has had more than its fair share of instances where property and human rights were flouted with mind-boggling impunity. It is incumbent on not only the new dispensation but also all of us to put our shoulders to the wheel and walk the talk with regard to the restoration of the rule of law in Zimbabwe. I verily believe that negotiations are currently under way amongst various interested parties to provide appropriate redress in all those instances where certain BIPPAs had been violated.
BW — In your view, are there any pieces of legislation that are still affecting the flow of investments? What may also be of concern to the investors is the Indigenisation Act. Of course, there is a delegated legislation that abolished the minimum 51 percent equity threshold to locals in most sectors except diamonds and platinum. Is this good enough given there is no amendment to the principal legislation?
MM — It goes without saying that the indigenisation legislation has been a major impediment to the flow of investments right across the board. The policy shift which was enunciated by Patrick Anthony Chinamasa, the Minister of Finance & Economic Planning, in his Budget Statement in November last year was a most welcome development. What now remains to be done is a swift follow through as demonstrable testimony that Zimbabwe is indeed open for business. Capital, whether it is foreign or local, is a very timid animal. It will simply not find its way into a country where the legislative framework has no certainty, clarity, predictability, consistency and sustainability.
And lastly, there are certain specialist institutions in respect of which we are in dire need of assistance in terms of technical, financial and material resources. The Special Court for Income Tax Appeals, the Fiscal Court of Appeal, the Deeds Registry Office, the Companies Office and the Surveyor-General’s Office are some of the specialist institutions which come readily to mind. As we work our way back into the international fold, we should be able to tap into the vast resources which are now accessible to us. We simply cannot afford to go it alone.
