Hokonya told journalists in Harare that the ambiguity surrounding the implementation of the indigenisation policy forced mining companies to defer investment plans, a move that is detrimental to the growth of the industry.
He said investment into the sector continues to slow down, adding that government’s failure to review the policies would see the industry crumbling in the near future.
According to the indigenisation law, mining companies are compelled to cede 51% of their shares to indigenous Zimbabweans. As a result, investors are now shunning Zimbabwe in favour of neighbouring countries which are competitive in terms of legislative certainty.
The situation, he said, was worsened by government’s reluctance to restructure the country’s huge debt amounting to US$9 billion, a situation that renders Zimbabwe regionally uncompetitive in terms of foreign investments.
“The uncertainty surrounding the implementation of the indigenisation law comes when the country is carrying a huge debt overhang and the combination of the two is a serious drawback in attracting investments,” he said.
“We, as a country, need to be brave enough to negotiate with our creditors to restructure our debt and also put in place legislation which will allow the development of the mining sector, which is key to our economy,” Hokonya said.
“Mining remains the only sector that can revive the economy because of the international competitiveness of the country’s minerals in terms of pricing and quality,” he said.
Other sectors of the economy have lost competiveness globally in terms of quality and pricing, he added.
Mining last year accounted for 50% of the country’s total exports and contributed to more than 13% of GDP.
According to the Chamber of Mines, the sector is expected to contribute US$2,6 billion to national exports this year, but the figure could be higher if beneficiation plans come to fruition.
Last year, total tax paid by the mining sector to government was around US$311 million, about 12% of the revenue collected by government. However, the contribution would increase to around 18% should diamond revenues be incorporated.