Controversial laws to force foreign companies to surrender their majority shares to blacks have led two leading German bodies to call off a proposed investment mission to Zimbabwe, the German embassy said.
The country's emergence since last year from a decade of economic collapse has been thrown into confusion by the laws published in early February, according to economists.
They say President Robert Mugabes arm of the country’s year-old coalition government appears on the brink of carrying out seizures of white-owned business that would replicate his violent grab of white- owned farms.
Under the Indigenisation and Economic Empowerment act, middle- to large-scale companies have to cede 51 per cent of their ownership to blacks, of face five years in jail. The laws bar whites from participating in a wide variety of businesses, from agriculture to hairdressing.
A statement from German ambassador to Harare, Albrecht Conze, said that both the Hamburg-based German African Business Association and the German-Southern African Chamber of Industry and Commerce in Johannesburg had put on hold plans to bring a group of investors to the country.
Andreas Wenzel, Southern African manager of the Hamburg GmbH association, was quoted as saying: "Under the current circumstances Zimbabwe is a no-go area for foreign investment."
Conze said the two German business organisations until now had been among a few foreign business delegations demonstrating willingness to re-engage in Zimbabwe.
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