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EU Ambassador to Zimbabwe Mr Aldo Dell’Ariccia,

Indications that the European Union is keen to normalise relations with Zimbabwe are most welcome. That normalisation of relations is long overdue is undoubted, especially considering that the bloc imposed sanctions on Zimbabwe in a bid to stop a historical necessity — correcting a colonial injustice in the pattern of land ownership in Zimbabwe, skewed against indigenous people in favour of the invaders.
Head of the EU delegation to Zimbabwe ambassador Aldo Dell’Ariccia told the media last week that the change of stance was a result of positive developments in Zimbabwe. He said the review of the Indigenisation and Economic Empowerment Act to allow for sector-specific implementation was constructive.

Government is in the process of clarifying the Indigenisation Act to ensure a sector specific approach that puts 100 percent ownership of resources in the hands of Zimbabweans, with the only debate pertaining to the percentage of sharing proceeds from the investment with investors. The review, ultimately, will allow investors to recover initial capital investment, receive an appropriate return on investment and recoup operational costs.

“The messages that are coming from the Zimbabwe Government at the highest level are really constructive,” said ambassador Dell’Ariccia.
Speaking at the official opening of the Zimbabwe International Trade Fair in April, President Mugabe assured foreign investors that their money would be safe in Zimbabwe. He said there was no policy to nationalise foreign companies.

He stated that indigenisation would be applied sector by sector, depending on the investor’s contribution. This is a significant variation from the Indigenisation and Economic Empowerment Act under which all foreign companies with investment above US$500 000 were required to sell at least 51 percent stake to indigenous Zimbabweans.

Information, Media and Broadcasting Services Minister Professor Jonathan Moyo recently announced the policy review, saying Zimbabweans would now own 100 percent of their minerals and agricultural resource while sharing the profits or production output with the foreign investor on a mutually-agreed scale, and that the investor would be allowed to recover his initial investment.

In response to these changes, Ambassador Dell’Ariccia said the move could unlock Foreign Direct Investment from EU countries and help in raising funds for the implementation of Zim-Asset.

Since the imposition of sanctions on Zimbabwe in response to the historic land reform programme, the EU and the US have denied the Government any budgetary support, choosing instead to channel development assistance through non-governmental organisations.

The thawing of relations means the EU will have to deal directly with Government, enabling Zimbabwe to set priority areas in need of resources.
These developments are vital for Zimbabwe as they give the country greater discretionary space in terms of trade and sourcing requirements. They also create a bigger catchment area in terms of exports, imports and investments, thus allowing the country to get the best prices in an open market.

The restoration of normal relations between the EU and Zimbabwe can only work to the mutual benefit of the two parties. It means the two can now engage on the basis of mutual respect. Zimbabwe has a lot of mineral resources which the EU needs and also provides a huge market for its products.

On the other hand, the fact that the EU is prepared to normalise relations without setting preconditions, especially around the land reform programme, is a major victory for the country.

The bloc is already helping small-scale resettled sugarcane producers in the Lowveld.

This is an endorsement which should, hopefully, set the tone for other potential investors. What is needed now is to draft contracts conducive to a win-win situation.