ZIMBABWE’s controversial indigenisation and economic empowerment laws will be be amended to incorporate previous changes to reflect the new policy changes, says President Robert Mugabe on Thursday during the opening of parliament of the fourth session of the eighth parliament yesterday.(Thursday).
“It will be recalled that I issued a statement to clarify government’s position regarding the Indigenization and Economic Empowerment Policy on April 11, 2016. The relevant act will thus be amended to bring it into consonance with the enunciated policy position,” Mugabe said.
In April this year, Mugabe moved to clarify the law by suggesting that its implementation would be reasonable and sector-based.
This followed conflicting positions by his ministers over implementation of the law and after indigenization minister and his nephew, Patrick Zhuwao, had threatened to close shops of non-compliance foreign companies by a deadline set on March 31, 2016.
Mugabe acknowledged that the conflicting positions had caused confusion among Zimbabweans, the business community, current and potential investors, thereby undermining market confidence.
The law, enacted in 2008, requires foreign businesses to cede controlling interest to local black Zimbabweans. A follow-up guideline issued in 2010 provides that the process should be completed in five years.
Over the years, the transfer of shares has been slow and focused on the mining sector, as ministers in different ministries held varied views on whether to force foreign companies under their watch to sell 51 percent of the shares to local buyers.
In his clarifying statement in April, Mugabe said the government would insist on 51 percent ownership of new mining companies while the existing miners would be allowed to stay once they retain 75 percent of the “gross value of the exploited resources” in the country, in terms of taxes, wages, community benefits and procurement.
“The natural resources sector, non-resources sector and the reserved sector are to be approached differently,” Mugabe said then, adding that companies outside the natural resources sector, including manufacturing, telecommunications, energy and banking, will negotiate empowerment credits or quotas with appropriate ministries.
Retail and wholesale trade, beauty salons, estate agencies, grain milling, bakeries, tobacco processing and provision of local arts and crafts are reserved for strictly locals.
Mugabe’s remarks in parliament comes as the International Monetary Fund this week projected Zimbabwe’s economy to record negative growth of -0.3 percent in 2016 and -2.5 percent in 2017, marking the first time that Zimbabwe slides back into recession after seven years of positive growth from a decade-long recession. – Enditem