German executives were in Zimbabwe to scout for local partners during a four-day visit organized by the German African Business Association and The Southern African–German Chamber of Commerce and Industry. Described as “one of the most interesting countries for German investment”, the executives did express fears over a new equity law giving locals majority shares in foreign-owned firms.

“We need clarity on 'indigenisation',” Andreas Wenzel, head of a delegation of 21 executives, told journalists after meetings with Prime Minister Morgan Tsvangirai and other government officials on February 17.

He was referring to the empowerment and 'indigenisation' law in Zimbabwe passed in 2004 which requires that foreign-owned companies sell 51 percent of their shares to local investors.

The German business executives with interests in mining, banking and energy, were in Harare from February 14 to 17 to explore potential partnerships with Zimbabwean companies.

“We are trying to find Zimbabwean partners for German businesses,” Wenzel said. “This time the focus is on the mining industry. The interest was mainly in chrome for German industries. We'd like to closely monitor the situation as it evolves specifically in the mining industry.

Meetings with PM, government to assuage anxieties
“We need a level playing field for all local and international investors. That's the message we left with both (Zimbabwe African Union-Patriotic Front) Zanu-PF and (Movement for Democratic Change) MDC representatives of the government.”

Wenzel, the Senior Vice President of the Hamburg-based German African Business Association or Afrika-Verein der deutschen Wirtschaft (AV), said the 'indigenisation' laws could scare away potential investors at a time when Zimbabwe needs investment to revive its economy.  The nation is battling to recover after a nearly decade-long downturn.

“No investor wants to come into the country when he hears that at the very first doorstep he must put 51 percent of his venture into unfamiliar hands,” Wenzel commented.

Prime Minister Tsvangirai sought to allay investors' fears over the equity laws saying his MDC party was pushing for amendments to make the laws favourable to all investors.

“We have decriminalised investment as was in the (original) regulations,” Tsvangirai told the business executives. “Then we also made it clear that the 51 percent threshold is aspirational.”

Diverse opportunities in Zimbabwe
The leadership of the AV voiced guarded optimism about the southern African nation, stating that “the opportunities that lie in Zimbabwe are widespread and diverse.” He noted, “ I am personally very optimistic about Zimbabwe despite the political climate. Our hope is that there is a solution to the political dilemma. Zimbabwe is really one of the most interesting countries for German investment, for German business in Africa.”

Zimbabwe's economy is slowly recovering from a nearly decade-long crisis, which saw inflation at one point peak to 231 million percent, after the country's main political rivals President Robert Mugabe and Prime Minister Tsvangirai formed a power-sharing government two years ago.

The economic recovery has been hindered as anticipated foreign investors have chosen to monitor the situation as the parties to the power-sharing government wrestle over the allocation of key government jobs.