GERMAN Ambassador to Zimbabwe Albrecht Conze has welcomed Cabinet’s decision to suspend the controversial indigenisation regulations, saying this will give the government opportunity to consult widely and come up with constructive empowerment laws.
On Tuesday cabinet suspended the law to allow for broad-based consultations on the best way to proceed.
“Time has now come for a sound and unexcited discussion about the best methods for constructive empowerment which creates new wealth for Zimbabweans instead of destroying existing assets,” said Conze in a statement this week.
“German Embassy welcomes the Zimbabwean government’s decision to suspend and review rules aimed at obliging foreign-owned companies to sell a majority stake to ‘indigenous’ Zimbabweans.”
Conze said his country is “ready to participate in this debate and assist the process where possible”.
Under the regulations, which took effect on March 1, foreign-owned companies, including banks and mines, had 45 days to submit proposals on how they planned to sell 51% of the shares in local subsidiaries to black Zimbabweans within five years.
The deadline for submitting proposals was yesterday (Thursday).
Pressure has been mounting on Zimbabwe to review the legislation which had the potential to scare away investors and was viewed as a racially-biased document.
Harare-based independent economists John Robertson said it is premature for investors to celebrate the suspension.
“As long it’s a suspension and not a total withdrawal, it does not wipe away the serious concerns raised by investors. Investors would still feel that the investment climate is still not conducive for meaningful business. The suspension can be lifted anytime,” he said.
Robertson however said the suspension period affords government the time to reflect on the “noise generated by the Act”.
“Government should now use this opportunity to remedy the mistakes of the current Act. Everybody concerned should be allowed to input on the proposed replacement act,” he said.
The suspension of the regulations is seen as an open rebuke to Indigenisation and Economic Empowerment Minister Saviour Kasukuwere who recently boasted that he “only consults when there is need”.
He vowed that there would be no going back on the implementation of the regulations without any amendments.
Conze said international confidence in Zimbabwe as a safe environment for foreign investment had suffered a serious blow after the gazetting of regulations.
He said: “It will take concrete action by the Zimbabwean government to have this confidence restored.”
The German business community would continue to assess progress and come back to Zimbabwe with new investments as the rule of law is further restored and property rights fully respected, he said.
However, a German business delegation postponed its planned visit to Zimbabwe citing the controversial empowerment regulations as the main reason for the deferment.
The Germans said the country was now a “no-go area” for foreign investment and unattractive for German businesses due to the regulations.