Beyond niceties, Mugabe's SA visit is all ‘business’

2015-04-09 07:37

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President Jacob Zuma held Zimbabwean President Robert Mugabe’s hand as the 72-year-old guided the 91-year-old out of the Union Buildings room where they conducted a joint press conference during Mugabe’s first state visit to South Africa since 1994.

It was a gesture that would more likely be extended to an elder, keen not to repeat the recent tumble in the glare of the world’s media, rather than a “dear brother”, as Zuma had called him at yesterday’s press conference.

Mugabe, who slammed Zuma at a Southern African Development Community (SADC) summit last year after South Africa refused to sign a trade protocol, didn’t return the niceties. He merely addressed the South African president as “President Zuma”.

Zimbabwe was angry with South Africa at the SADC summit on industrialisation last year, accusing their southern neighbour of benefitting alone from the economic growth in the region.

South Africa, in turn, felt the protocol was placing punitive restrictions on companies wanting to invest in the region.

On the surface there were warm handshakes and mutual reminiscing about the struggle against apartheid in the bad old days and Cecil John Rhodes latterly, but the main theme of Mugabe’s three-day visit to South Africa this week is business.

South Africa is keen to find investment opportunities for its companies, but also to alleviate the burden of thousands of economic migrants from Zimbabwe. Zimbabwe, meanwhile, is keen to make good on its election promises and to find ways to fund its responsibilities.

Mugabe’s election as African Union chairperson in January and SADC chairperson last year – a return to respectability for Africa’s oldest ruler, who has been in office for 35 years – have brought with them increased international travel obligations and the need to roll out the red carpet to heads of state when Zimbabwe is hosting a SADC summit.

Right now, however, the country barely has money to pay its civil service.

Its economy has been slow to pick up after the 2013 elections – generally regarded as sufficiently free and fair to be credible – and finance minister Patrick Chinamasa admitted as much to journalists.

“It is a process,” he said yesterday on the sidelines of the meeting. “We have laid a very strong foundation for its recovery. There are one or two areas that still need attention, but we are confident in the groundwork we are putting in place”.

He also hinted that Zimbabwe wanted to establish more policy certainty – more particularly about its indigenisation policy, according to which Zimbabwe must retain a 51% stake in foreign businesses in the country.

Up to now South African companies investing in Zimbabwe had informal arrangements with that government to bypass the indigenisation laws where necessary, but Trade and Industry Minister Rob Davies told City Press more clarity would be given at the meeting between business and government in Pretoria today.

This uncertainty has been one of the main stumbling blocks to foreign investment in Zimbabwe. South Africa’s major investments in Zimbabwe are mining, agriculture (sugar cane) and in the financial and hospitality sectors.

Earlier yesterday in a joint press conference with Zuma, Mugabe gave clarity on the policy for the first time, saying the 51-49 split only applied to mineral extraction.

“I said African resources belong to Africans. I don’t believe capital is more important than resources,” Mugabe said.

“Capital that is aimed at mining is drawing from my country a resource that cannot be replaced tomorrow. You are leaving holes in my country and you want to say the capital is more valuable.

“The gold that I have, the God-given gold that I have is much more beneficial and important to my country. Capital leaves us with gaping earth to fill in.

“What we are saying therefore is we, as owners of natural resources, must have at least 51% of that earnings and we allow that company 49%. If that resource is from outside, if you want to manufacture gadgets that we didn’t have before, that is negotiated now.”

Chinamasa clarified afterwards saying the indigenisation law “is not a one size fits all”.

He said Zimbabwe had been amending its indigenisation legislation.

“Each minister for each sector will set out what the thresholds will be,” he said.

The groundwork for the economic talks was laid yesterday by the signing of various agreements between the ministers of the two countries, one of which established a binational commission for cooperation headed directly by the respective presidents.

The other issues are set to be thrashed out in the business and government forum today, and more likely also in the weeks and months to come.

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