VICE-president Emmerson Mnangagwa says government is in the process of realigning indigenisation laws — widely deemed as a barrier to the much-needed foreign direct investment — as they currently lack clarity and consistency, among other shortcomings.
Elias Mambo/Hazel Ndebele
In an interview with the Zimbabwe Independent this week, Mnangagwa said he has met various stakeholders keen to invest in Zimbabwe but they have raised concerns over inconsistencies in relation to indigenisation — which is nothing new as investors have over the years repeatedly protested with government refusing to budge.
The indigenisation law of 2007 compels all foreign-owned companies to relinquish 51% shares to indigenous Zimbabweans such that they remain with a maximum 49% equity.
Mnangagwa said there was need for clarity and consistency in implementing the programme. “I have said it several times that government will look into the issues to deal with building investor confidence by re-looking our indigenisation policy,” Mnangagwa said.
“I have met various investors who have all expressed interest in investing in the country and their request and concerns remain the same. We are piling pressure on Finance minister Patrick Chinamasa who said government was going to look into such issues so that investors are comfortable and make investments in the country easy.
“Implementation of the indigenisation policy should be sector-based and that is what Chinamasa is seized with at the moment. It is not a one-size-fits all kind of arrangement.”
In a memorandum attached to a letter written to the International Monetary Fund in November last year, Chinamasa conceded clarification would help allay misconceptions on the security of investments and property rights.
“Policy clarity and consistency would significantly improve Zimbabwe’s business climate and attract much-needed capital flows,” wrote Chinamasa.
According to the memo, Indigenisation minister Chris Mushohwe is supposed to communicate the necessary clarification on the laws by way of a Notice in the Government Gazette in terms of Section 5 (4) of the Regulations (2010).
However, a fortnight ago Mushohwe told a local newspaper that he was still in the dark over the responsibilities of his ministry.
Mushohwe could not be reached for comment as his mobile phone constantly went unanswered.
According to the Chamber of Mines, since the enactment of the Indigenisation Act the country has lost at least US$4 billion worth of potential mining revenue in five years due to negative effects of the policy blamed for spooking potential investors.