Zim companies to procure 50% of goods from local suppliers

ALL companies operating in the country will have to buy 50 percent of their goods and services from indigenous suppliers if ongoing amendments to the Indigenisation and Economic Empowerment Regulations are approved.

Section 12 of Statutory Instrument 21-2010, as amended in March, required that all public institutions procure at least 50 percent of their goods and services from indigenous suppliers.

But appearing before the Parliamentary Thematic Committee on Indigenisation and Empowerment yesterday, officials from the National Indigenisation and Economic Empowerment Board said they were now targeting the private sector as well, the Herald reported.

Zanu-PF Senator Cleveria Chizema chairs the committee.

"We are currently working on amending Indigenisation and Empowerment regulations so that the requirement that companies procure at least 50 percent of their goods and services from indigenous companies spreads or covers private companies as well," said Nieeb chief executive officer Mr Wilson Gwatiringa.

"Currently, the regulations talk about those companies which procure their goods and services in terms of the State Procurement Act which then means the public institutions.

"But what we have been doing over the years is to engage all the companies that we deal with as we assess indigenisation implementation plans to have them procure at least 50 percent of their goods and services from locals so that we get business for indigenous companies.

"It is pleasing to note that a lot of the big companies, particularly in the mining sector, are actually doing exactly what we asked them to do.

"They are procuring locally as much as possible except obviously for those specialised services which maybe are not available in the country."

Mr Gwatiringa said his board was engaging the State Procurement Board to ensure there was bias towards buying local goods and services.

In an interview with the Herald after the meeting, Mr Gwatiringa said the 50 percent procurement threshold was sustainable despite statistics from the Confederation of Zimbabwe Industries showing that industrial capacity utilisation was below 40 percent.

"If a company invites suppliers, those with capacity will be able to supply," he said. "We are regulators who want to see local companies being empowered and we believe it is sustainable.

"The State Procurement Board will be very much involved in ensuring this is adhered to."

Mr Gwatiringa said about 1 470 indigenisation plans had been processed, with the mining and manufacturing sectors leading with 464 and 401 respectively.

On financial institutions, Mr Gwatiringa said, Government did not intend to "indigenise depositors' money", adding that negotiations with the financial institutions on indigenisation mechanisms were still underway.

He said a taskforce had been set up to inspect all retail shops operating in the country to establish if all of them complied with the Indigenisation and Economic Empowerment Act on reserved sectors of the economy.

Mr Gwatiringa said they received about 1 300 indigenisation compliance certification applications, with about 600 others having been issued.

The applications are in compliance with a May 17, 2013 Government Gazette regulation making it mandatory for all local and foreign firms in reserved sectors to apply for indigenisation compliance certificates by January 1, 2014.

He said out of 61 registered community share ownership trusts, 16 were operational across the country.

He said companies in community share ownership trusts pledged about US$116,4 million, but only US$30 million had been disbursed.