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‘BEE law will not be reviewed’

GOVERNMENT will not review the indigenisation regulations threshold compelling foreign-owned mining companies to dispose of a controlling stake to black Zimbabweans despite resistance from industry players.

Empowerment minister Saviour Kasukuwere on Monday told investors attending the launch of Prime Minister Morgan Tsvangirai’s investors’ roundtable that government would not budge on the 51/49% shareholding between blacks and foreign investors.
The premier’s investors’ roundtable is a quarterly forum between government, the private sector and investors on critical issues impacting business and investment in Zimbabwe.
Kasukuwere in June, however, reviewed the regulations resulting in the setting up of 13 sector-specific sub-committees tasked with advising government on the modus operandi of the empowerment exercise following resistance both within and outside government.
Government appointed PricewaterhouseCoopers territory senior partner Tinashe Rwodzi to chair the 13 member sub-committee comprising a banker, a representative of mining companies, interest groups and politicians.
“If there is anybody doubting about mining, the 51% threshold will not change. Government has high expectations on this sector,” Kasukuwere said. “The bigger picture is that people are given the chance to participate in the growth of the economy. The mining sector is going to get priority as this is the most awaited resource still in the hands of the few.”
He said his ministry would in a fortnight present to cabinet a report compiled by the sub-committee on mining.
Asked by businessdigest on whether his ministry would take on board contrary submissions made by the special sub-committee, Kasukuwere said: “We will not budge. The committee is only tasked to recommend to the ministry and it is upon us to take heed of the advice or not.”
Rwodzi could not be drawn to comment on this matter.
A Statutory Instrument gazetted in June following concerns raised on initial empowerment regulations mandated sector committees to advice government on this policy.
The piece of legislation stated that the committees should among other issues determine “appropriate minimum net asset value threshold above which a business in the sector or subsector concerned is required to comply with these regulations”.
The committee is also tasked with advising Kasukuwere on the lesser shares, maximum periods and “weightings to be assigned to socially and economically desirable objectives.”
However, resistance on the empowerment threshold saw Chamber of Mines of Zimbabwe president Victor Gapare being booted out of the mining subsector committee after he was reportedly accused of singing from a different hymn book with his colleagues.
The chamber wants foreign companies to cede 15% shareholding to locals arguing that Zimbabwe badly needs foreign direct investment (FDI) in the capital intensive industry. FDI plummeted to 5% of Gross Domestic Product during the decade long economic decline from an all-time high of 46%. The mining industry, according to a recent survey carried by the chamber, requires up to US$5 billion to recapitalise over the next five years.
Government is this year expecting an 8,1% economic growth buoyed by a nearly 50% growth in mining and a resurgence in agriculture.

 

Bernard Mpofu

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