OWN CORRESPONDENT, Johannesburg | Thursday 5.10pm
ZIMBABWE faces economic isolation over President Robert Mugabe’s land-grab campaign, which threatens property rights and foreign investor confidence, THE South African Chamber of Business warned on Thursday.
Sacob head Kevin Wakeford said Mugabe’s hardline speech on the country’s land ownership turmoil on Wednesday will add to the woes of an economy already reeling from its worst crisis in decades. ”What’s taking place in Zimbabwe is self-imposed economic isolation,” Wakeford said in Harare.
Wakeford, in Zimbabwe to consult with local business and government, said Mugabe’s tough talk will further erode investor confidence in the country and region.
”Business takes on a risk approach at the end of the day. Property ownership and the rule of law are fundamental to investment and economic growth,” Wakeford said. The rand, already under pressure from the dollar’s strength, hit record lows to the US unit this week on foreign concern over possible contagion effects from Zimbabwe, although domestic analysts say most of these are unfounded. South Africa’s economy dwarfs its smaller neighbour and although Zimbabwe is its main trading partner in the region, it takes less than 4% of the bigger country’s exports.
Wakeford said trade between the two countries has become increasingly strained with South African financial institutions suspending credit guarantees for exporters as Zimbabwe’s foreign exchange shortages worsened in recent months. ”Our trading environment behaviour has become extremely cautionary to say the least,” he said. — Reuters
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