Business / Economy
Zimbabwe banking institutions must comply with empowerment law
02 Aug 2011 at 06:07hrs | Views
Victoria Falls ' A TOTAL of 700 foreign-owned companies have submitted their indigenisation and empowerment proposals to the Government.
There are soon to be moves to ensure that banking institutions also comply with the law.
Youth Development, Indigenisation and Empowerment Minister Saviour Kasukuwere told the Confederation of Zimbabwe Industries annual congress in Victoria Falls last week that 175 mining companies were among those which had submitted their proposals.
The indigenisation process would soon move to the banking sector, he said, amid concerns of their apparent lack of keenness to lend to local firms.
Minister Kasukuwere said Government sought to ensure the growth of the economy by bringing disadvantaged groups into the mainstream economy.
He said the future of the economy lay in its mineral resources hence the need to ensure the participation of the indigenous people.
Government rejected the mining companies' proposals to sell 25 percent direct equity to locals and 26 percent to be made up of social investment credits.
The Indigenisation and Empowerment Act requires foreign mining firms to sell 51 percent direct equity to locals or the State.
Local communities, workers and management will get direct equity in foreign mining firms and this will be taken from the 26 percent mines had wanted to be met through social investment credits.
Part of the 26 percent mining firms wanted met through social credits will also be housed under a sovereign wealth fund for future generations.
While the law empowers the minister to exempt certain firms, Minister Kasukuwere reiterated there would be no special favours for companies or investors,
"There is nobody who is special, nobody will be treated differently," he said.
"So far more than 700 companies have submitted their IDG (indigenisation proposals) forms across the board and of these more than 175 mining companies have submitted their proposals.
"We have said NO, do not worry about social investments, Government will do that for our people. We asked some of the companies to give evidence of what they have done for our communities so that we will have confidence in them, but none did."
Minister Kasukuwere said local people should benefit from the finite mineral resources, considering the potential loss they suffer such as in Mhangura, where a particular mineral was mined out.
"As we indigenise, let's (also) take a long-term view on how do we ensure the manufacturing sector recovers. How can you have a situation where banks operating and licensed in your country refuse to lend money to the people?
"Because we have been focusing on mining we will move to the banking sector. We need to ensure banks respect and respond to the aspirations of the people.
Banking institutions unwilling to comply, said Minister Kasukuwere, were free to leave the country, as some of them were "behaving like estranged women" by refusing to lend money to local companies.
There are soon to be moves to ensure that banking institutions also comply with the law.
Youth Development, Indigenisation and Empowerment Minister Saviour Kasukuwere told the Confederation of Zimbabwe Industries annual congress in Victoria Falls last week that 175 mining companies were among those which had submitted their proposals.
The indigenisation process would soon move to the banking sector, he said, amid concerns of their apparent lack of keenness to lend to local firms.
Minister Kasukuwere said Government sought to ensure the growth of the economy by bringing disadvantaged groups into the mainstream economy.
He said the future of the economy lay in its mineral resources hence the need to ensure the participation of the indigenous people.
Government rejected the mining companies' proposals to sell 25 percent direct equity to locals and 26 percent to be made up of social investment credits.
The Indigenisation and Empowerment Act requires foreign mining firms to sell 51 percent direct equity to locals or the State.
Local communities, workers and management will get direct equity in foreign mining firms and this will be taken from the 26 percent mines had wanted to be met through social investment credits.
Part of the 26 percent mining firms wanted met through social credits will also be housed under a sovereign wealth fund for future generations.
While the law empowers the minister to exempt certain firms, Minister Kasukuwere reiterated there would be no special favours for companies or investors,
"There is nobody who is special, nobody will be treated differently," he said.
"So far more than 700 companies have submitted their IDG (indigenisation proposals) forms across the board and of these more than 175 mining companies have submitted their proposals.
"We have said NO, do not worry about social investments, Government will do that for our people. We asked some of the companies to give evidence of what they have done for our communities so that we will have confidence in them, but none did."
Minister Kasukuwere said local people should benefit from the finite mineral resources, considering the potential loss they suffer such as in Mhangura, where a particular mineral was mined out.
"As we indigenise, let's (also) take a long-term view on how do we ensure the manufacturing sector recovers. How can you have a situation where banks operating and licensed in your country refuse to lend money to the people?
"Because we have been focusing on mining we will move to the banking sector. We need to ensure banks respect and respond to the aspirations of the people.
Banking institutions unwilling to comply, said Minister Kasukuwere, were free to leave the country, as some of them were "behaving like estranged women" by refusing to lend money to local companies.
Source - TH
