That didn’t take long. I wrote an article last week titled “Asset Expropriation Risk Soars in Post-Hyperinflation Zimbabwe,” and published it on Mises.co.za this morning. In it I explain why asset expropriation risk in Zimbabwe is the highest in Africa, and concluded that:
Everything points toward high and rising asset expropriation risk in Zimbabwe. The less ability the regime has to expropriate resources through monetary inflation and subsidized borrowing, the more it will rely on expropriating assets visibly. The tragic irony of this is that Zimbabwe holds great investment opportunities following the ravages of hyperinflation, yet pervasive asset expropriation risk neuters those opportunities significantly. Investors should be aware that expropriation may not end with farms, banks and mines, but could spread to other industries. In fact, Zimbabwe’s current governance and institutional arrangements that place it among the least free countries in the world essentially guarantee more expropriations in the future.
Thamsanqa Netha and Ana Monteiro have just brought my attention to a Bloomberg article that says the Zimbabwe government is preparing a law that would allow it to seize company stakes without compensating the owners.
Talk about being prophetic bloom.bg/YFAJbv “@chrislbecker: Post-Hyperinflation Zimbabwe bit.ly/11CR4y9“” Thanks Thamsanqa.”
— Thamsanqa Netha (@ThamsanqaNetha) April 22, 2013
@chrislbecker – Your great piece is timeous: #Zimbabwe Prepares Law to Seize Company Stakes Without Paying bloom.bg/11uDWOm
— Ana Monteiro (@sistersipho) April 22, 2013
There are good reasons for this spate of asset seizures in Zimbabwe, it was quite predictable. For more insight, read the Mises.co.za article. For even deeper analysis and risk monitoring, get in touch with me and I could introduce the Asset Expropriation Risk monitor to you.
UPDATE: In my haste to put this post up and get back to work, I wrote in the title that the law had already been “passed.” It has not been passed, it is still in the pipeline.