GOVERNMENT is gradually climbing down the ladder of the indigenisation policy through special economic zones (SEZs) which will be set up around the country where foreign investors will be exempted from complying with the investor-spooking empowerment laws.
Under the indigenisation law, foreign-owned companies are required to cede 51% shareholding to locals and remain with at most 49%.
Top government sources this week told the Zimbabwe Independent the setting up of SEZs, a model adopted from China, is an indirect acknowledgement by the Zanu PF government that indigenisation is problematic, but for political expediency it cannot be totally scrapped.
Cabinet has since instructed Tourism minister Walter Mzembi to run a pilot SEZ project in Victoria Falls, sources said.
In an interview this week, Vice-President Emmerson Mnangagwa said the SEZs are expected to boost foreign direct investment into the country as part of efforts by government to create a friendly investment climate.
“No country can develop on its own” he said. “Under special economic zones a place such as Bulawayo is of major focus. Bulawayo needs to attract global companies to invest and there are companies which are searching for space to relocate and set up manufacturing firms.”
Last year President Robert Mugabe went to China and From Page 1
witnessed how China succeeded through SEZs. In China, SEZs were established by the central government under President Deng Xiaoping in the early 1980s as part of its “open the door, change the system” policy.
In February, Mnangagwa told the Independent government was in the process of realigning indigenisation laws — widely deemed a barrier to much-needed foreign direct investment as they currently lack clarity and consistency.
Documents seen by this paper show that the tourism industry’s pilot SEZ project involves the creation of Mosi-oa-Tunya Development Company Pvt Ltd. It should attract foreign investors to develop a 5 000-seater international convention centre, 300-room five-star resort hotel, a regional shopping mall with offices and banks.
“The company has already been given 274 hectares of land by the government with hopes of enhancing destination competitiveness of Victoria Falls,” said a source.
Last year government introduced an Amendment Bill to the Investment Act which, besides creating economic zones, calls for the exemption of foreign investors from complying with the country’s indigenisation and empowerment laws.