I mostly agree. I would probably put Zimbabwe as similar in risk as Australia from an oil and gas perspective, which is pretty sad imo. I don't know much about Australia though so probably shouldn't comment. I consider the UK a worse jurisdiction than Zimbabwe after the windfall profits tax and I won't touch the country. The US is quite a bit better than Zimbabwe imo. The jurisdiction I was referencing in my previous post is Namibia, which I view as quite a bit better than Zimbabwe (and would place it on par with the US from an O&G perspective, depending on the US state). The problems with Zimbabwe are widely known and I imagine a large majority of investors would dismiss investing in Zimbabwe outright. For me personally, the reasons I view it as high risk are:
Land confiscation in the early 2000s in which white farmers had to flee their homes with little warning. Some were murdered
Two rounds of hyper inflation (2008 as well as 2020). Countries that experience hyper inflation indicate severe government incompetence (or in some circumstances desperation). The fact that Zimbabwe didn't learn their lesson the first time around a decade prior to pretty sad; hyperinflation has devastating effects on an economy. Invictus is shielded somewhat from future hyper inflation by our special economic zone that allows us to operate entirely in foreign currency.
High amounts of corruption per various published corruption indices
Apparent delays in the signing of the PPSA. Scott has indicated multiple times over the last 2 years that the PPSA was imminent. I'm not too worried about PPSA but I wouldn't be surprised if the government is trying to get better fiscal terms.
The first two occurred under Robert Mugabe, but my understanding is that most of the government carried over from the Mugabe era. My only personal experience with corruption in Africa is my Dad needing to bribe the border guards at various borders in southern Africa. I remember the police being pretty worthless too. With that said, the fact I'm heavily invested in Invictus indicates my belief that the jurisdictional risk is overblown.
IVZ Price at posting:
5.6¢ Sentiment: Buy Disclosure: Held
