The United Kingdom (UK) has once again reiterated that doing business in Zimbabwe remains risky citing a number of obstacles including corruption and poor human rights record.
In its latest Guidance report on Overseas Business Risk on Zimbabwe, the UK says poor human rights records, corruption among other issues remain an impediment for ease of business in the country.
“Zimbabwe faces continued cycles of economic and humanitarian challenges. A bumper harvest and a post-COVID recovery will bring improvements, but longer-term prospects, and indeed investment opportunities, remain contingent on addressing deep underlying structural challenges.
“These challenges include prohibitive and volatile foreign exchange controls, high inflation, fragile property rights, and pervasive corruption. The high and volatile inflation also makes the business environment more uncertain: many businesses price in US dollars but as discussed above the supply of foreign currency is erratic,” read the report.
The UK report said the Reserve Bank of Zimbabwe instituted foreign currency auction system has been undependable and sluggish.
“Necessary currency reforms have been slow, and whilst businesses are currently able to pay overseas suppliers and repatriate profits through the foreign currency auction, this process is slow and unreliable. Exchange rate management by the Reserve Bank continues to leave a large gap between the official and parallel market rates, increasing the risk of arbitrage.
“Zimbabwe has a poor record on human rights. Continued abuses have resulted in the placement of targeted sanctions (travel bans and asset freezes) on four security chiefs on 1 Feb to reflect their role in the most egregious human rights violations (death of 6 protestors in Aug 2018 and 17 protestors in Jan 2019).
“Corruption in Zimbabwe is widespread. Politically connected individuals are often awarded large state contracts, or allocated state-controlled resources, such as foreign currency. For many of the reasons listed above, doing business in Zimbabwe can be challenging, with a number of obstacles and pitfalls,” said the UK.