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Tourists start to return to Zimbabwe

The number of tourists visiting Zimbabwe this year has more than tripled, a trade official said Monday as entrepreneurs tried to lure investors to the troubled African country.
/ Source: The Associated Press

The number of tourists visiting Zimbabwe this year has more than tripled, a trade official said Monday as entrepreneurs tried to lure investors to the troubled southern African country.

Emmanuel Fundira, president of the Zimbabwe Council of Tourism, said at an investment conference in neighboring South Africa that a unity government formed in February has brought political and economic stability. But full recovery is very much linked to the success of the new government, which many fear is on the brink of collapse.

Zimbabwe has a wealth of minerals and natural attractions and was once the region's breadbasket. Many blame its economic meltdown on President Robert Mugabe's land policy under which thousands of white-owned commercial farms were seized in 2000. Mugabe, in power since independence from Britain in 1980, also is accused of undermining democracy.

Mugabe was forced into the coalition with longtime opposition leader Prime Minister Morgan Tsvangirai after elections last year that were inconclusive and marred by violence blamed on Mugabe's supporters.

Tourism received a boost when a number of Western countries lifted warnings against traveling to Zimbabwe after the unity government was formed. Zimbabwe is also hoping to benefit from the football World Cup to be held next year in neighboring South Africa.

Fundira said 362,000 people had visited the country by August compared to 100,000 visitors the year before.

A decade ago, Zimbabwe earned $250 million in revenue from tourism, Fundira said. This dropped to $40 million in 2005 but has risen to $100 million since the unity government was formed.

"The economy has got so much potential but political stability is extremely key," Fundira said.

With Tsvangirai's party in charge of the treasury, the new government moved quickly to scrap the local currency in favor of the U.S. dollar. It also removed price controls, which had left supermarket shelves bare and fuel scarce.

Zimbabwe is rich in gold, platinum and diamonds. It has a relatively sound road and power network but infrastructure is in need of upgrading and maintenance.

"The opportunities for business in Zimbabwe are immense," said hotelier Shingi Munyeza. "The question is: Do you get in now or later? Later is very costly. Early is very risky."

Munyeza is group chief executive of African Sun, a Zimbabwean company that has expanded into west and southern Africa.

Munyeza acknowledges it's not easy operating in a country where hyperinflation — now under control after the government abandoned the local currency — made it almost impossible to keep accurate financial records.

But in the last three months their hotels in the capital Harare have been 70 percent full, more than double last year's occupancy rates.

"This time last year we were always planing for the next day to be worse than the day before," he said. "Now this month has been better than last month."

However, many investors fear Zimbabwe's newfound stability is threatened.

Tsvangirai withdrew for a short period from the unity government last month, citing a surge in political violence and accusing Mugabe of undermining the coalition.

Foreign countries have said they will only lend money to Zimbabwe when there are more economic reforms and they can be sure funds will not be misused.

One entrepreneur who knows only too well the effects politics can have on business is South African Steve Tetluk. Seeing a gap in the information and technology field, Tetluk bought the rights to become Panasonic's official representative in February.

Since then he has seen his Zimbabwe sales increase by 20 percent while a recession in South Africa saw sales there drop 34 percent. In addition, his costs are substantially lower and profits three times higher than in his South African operation.

But when Tsvangirai withdrew, the deals dried up and they have only begun firming up again since the leader returned to the unity government.

"The politics and posturing are costing the country a huge amount in terms of investment," he said.