SOUTH African businesspeople in Zimbabwe on a trade and investment mission have expressed apprehension over the country’s Indigenisation Act, saying it exposed policy inconsistencies and contradictions within the coalition government.
Report by Faith Zaba
The businesspeople, part of the delegation of 33 companies led by their Trade and Industry deputy minister Elizabeth Thabethe, said they are worried that parties in the inclusive government are not speaking with one voice on the empowerment drive.
Zanu PF has vowed to force all foreign-owned companies to hand over 51% of their shareholdings to locals while the two MDC formations have opposed the legislation charging it is retrogressive.
The businesspeople said the implementation of the policy was ill-timed as it scared away investors.
Kagiso Jansen, chief executive officer of Mission Point, a hydraulics company based in Bloemfontein in the Free State province, said they were concerned local partners would not have money to pay for a 51% stake.
“So the main concern is that we need to find a way of working around the capitalisation of their shareholding,” said Jansen. “The general concern is that most of these guys want to do business and they are willing to partner, but capitalising their shareholding portion is one thing to look at, but I am sure there is a way.
“It’s beyond our control, but you cannot just come with a project and give shares for free. If maybe, for example, we can say to the guys this is your shareholding but you will pay for it with your dividends and we agree on a timeframe,” said Jansen.
He said they would determine the monetary value of the shares and every time there is a dividend, their portion of the dividend would be paid back like an internal loan.
Jansen said investors should take up political risk insurance to protect their investments.His views are shared by many investors. `