The Danish government says Zimbabwe should first address human rights issues in the country and compensate commercial farmers who were disposed of their land during the controversial land reform program that started in 2000 as conditions for re-engagement.
European Union (EU) member countries have individually been starting to rebuild their relations with Harare but the visiting Danish Trade and Co-operation Development Minister, Morgens Jensen, said his country will only re-engage Harare after addressing these issues.
Speaking to journalists after meeting Finance Minister Patrick Chinamasa, Agriculture Minister Joseph Made and Reserve Bank Governor John Mangudya, Jensen, who is on a three-day visit to Harare, said Denmark strongly believes in human rights, adding this forms the basis of their support to developing countries, including Zimbabwe.
He said while Zimbabwe’s economy is in bad shape, it has a potential to develop if necessary reforms are implemented.
The reforms, he said, include debt resolution and the compensation of white farmers who lost their land under the controversial land reform program and clarification of the country’s indigenization law.
Chinamasa assured Jensen that Zimbabwe would clarify the indigenization law, adding the government is ready to compensate the white farmers once resources became available.
He said following the lifting up of restrictive sanctions by the European Union and re-engagement talks, he expected the Danish government to channel all development support through the government to ensure transparency.
Jensen said his government was ready to support Zimbabwe in a number of areas including agriculture and energy.
Denmark is currently supporting the Judicial Service Commission in the construction of 30 court houses across the country.
Meanwhile, the new International Monetary Fund Resident Representative in Zimbabwe, Christian Beddies, said Harare must provide more clarity on its controversial black empowerment laws to investors and relax labor laws to restore confidence in the economy.
In addition to clarifying indigenization laws and easing labor restrictions, Beddies told Bloomberg this week Zimbabwe must restore “confidence in the financial sector” and start spending more on infrastructure and less on its wage bill.
Zimbabwe’s economy is struggling to gain traction more than a year after 90-year old President Robert Mugabe was re-elected to office.
Companies have been closing down with weak consumer spending and deflation taking hold. The indigenization law requires foreign-owned companies with assets of more than $500,000 to cede or sell a 51 percent stake to black locals.
Economic conditions in Zimbabwe are difficult, Beddies said, adding he believed that Zimbabwe has a strong economic potential that can be spring from the doldrums through sound policies.
The IMF re-opened its office in Harare in July after more than a decade’s absence. The organization is providing technical assistance to the government and helping to monitor implementation of economic policies.