Concern over the future of Western aid and investment in Africa as a whole appears to be rising in the wake of last weekend's disputed re-election of Zimbabwean President Robert Mugabe.

Corporations, think tanks and newspaper editorials, especially in the United States and Britain, have weighed in against the result and some have argued key regional neighbours, notably South Africa, must move to restore foreign confidence by pressing Mugabe to compromise on key issues with the opposition Movement for Democratic Change (MDC).

In contrast, it appears Mugabe, who has ruled since Independence in 1980, aims to tighten up. News reports from South Africa indicate he has rejected Pretoria's pleas to form a unity government and his Zimbabwe African National Union - Patriotic Front (ZANU-PF) party has enacted tough new media restrictions.

''This is not a good sign,'' one state department official told IPS . Washington had cut aid to Mugabe's government some time ago and is considering extending targeted diplomatic and financial sanctions against Mugabe and his closest associates and their families, as the European Union did late last month.

Congressional aides suggested tougher sanctions could emerge depending on what course Mugabe takes. ''There are a lot of people who think our efforts so far have been too little, too late, and they want to get tough,'' said one.

President George W Bush has denounced the elections and insisted Washington would not accept the results.

He and officials here and in London not only rejected the results of the election as fatally flawed by violence, intimidation and irregularities during the polling itself, but also warned that the economic consequences in terms of reduced foreign aid and investment were likely to ripple from Zimbabwe through the entire region.

Dampen investment

''It's likely to dampen investment in the region because, too often, Western investors don't distinguish among African countries,'' said Salih Booker, director of the advocacy group Africa Action.

The 'New Partnership for African Development' (Nepad) initiative, a regional programme led by South African President Thabo Mbeki and his Nigerian counterpart, Olusegun Obasanjo, also would suffer, he added.

''It undermines the credibility of the Nepad approach, because the proponents of Nepad in Africa are saying we'll get our internal houses in order with regard to human rights, good governance, and the rule of law if you in the West increase your investment in our development through aid, trade, and debt cancellation.''

Booker said protests against the election outcome within Zimbabwe and elsewhere in Africa show that major progress toward good governance and building a stronger civil society is being made.

Editorials in Western newspapers took a more negative line.

''The extraordinary decision by South African and Nigerian observers to endorse the outcome as 'legitimate', even if they declined to declare the poll 'free and fair', will undermine all efforts by the international community to support African development,'' the Financial Times of London said Thursday.

''The rest of Africa cannot be held responsible for Zimbabwe's tragedy but the failure of its neighbours — led by Mbeki — to condemn Mugabe's thuggery makes a nonsense of Nepad's ambitions.''

In a statement Thursday, the International Crisis Group (ICG's), a Brussels-based conflict-resolution think tank, called in particular on Mbeki to reject the election results as illegitimate in order to defend the democratic process in Africa and to bolster Nepad's prospects.

Mbeki, said ICG President Gareth Evans, ''can be a huge influence for good if he takes a stand on the basis of principle and does not accept the election outcome as legitimate.''

''Much is at stake here, both for Zimbabwe and Africa,'' the Washington Post said Thursday. ''There can be no economic development and no progress against the continent's awful poverty if dictators such as Mr Mugabe mock the rule of law and the wishes of their people.''

Serious consequences

Even before the election, a number of Western observers warned that the perception of an unfair or fixed election resulting in a Mugabe victory would likely have serious consequences for the rest of the region.

''Investors go where there is confidence, and Zimbabwe could be one more tale of woe,'' said Steve Hayes, president of the Washington-based Corporate Council on Africa, a lobby group representing companies which together have supplied some 85 percent of US direct investment in the region. ''Investors are looking at Zimbabwe as a test case.''

While strongly deploring the election outcome and the refusal, so far, of most other African governments to denounce it, Booker stressed that Westerners and investors need to see the more positive aspects of what has taken place.

The elections, he said, are ''indicative of the contradictory state of politics at the moment in Africa. Incumbent governments have figured out how to exploit advantages, even in the context of multi-party systems, and still gain acceptance. On the other hand, the legitimacy of unfair elections are increasingly being challenged.''

''What the media seem to be focused on is the divide between Africa and the West with respect to this election,'' said Booker. ''But that misses the more significant divide within Africa — between ruling parties and African civil societies.''

''The heightened scrutiny this election has received within Africa represents a major advance for democratic movements and needs to be taken into account,'' he added.