Zimbabwe to relax indigenisation provisions

Zimbabwe's pro-government newspaper, The Herald, reports that consultations over the possible exemption of new investments from complying with indigenisation provisions are underway, as government seeks to redesign the policy to encourage more Foreign Direct I nvestment.

The Indigenisation and Economic Empowerment Act requires foreign investors to have a maximum shareholding of 49% in local entities, a provision which is widely blamed for sapping the optimism that followed the dollarisation of the economy.

The newspaper quoted Economic Planning and Investment Promotion Minister Tapiwa Mashakada as stating that the government is working on a policy that may see new FDI being exempt from the provisions of the indigenisation laws as currently promulgated.

Speaking at the launch of Zimbabwe Australia Business Council, the Minister assured potential investors that government was doing all it can to improve the business environment.

Any effort to create an investor friendly environment ought to be celebrated. Zimbabwe remains laden with potential and FDI is one of the missing parts of the puzzle in efforts to realising the potential.

Thus, bringing certainty to investment and indigenisation laws will help investors make fully informed decisions and will be a significant help in efforts to promote FDI.