News / National
Zhuwao takes Zimbabwe indigenisation mantra to SA
21 Oct 2015 at 16:11hrs | Views
Newly-appointed Indigenisation minister Patrick Zhuwao will next week headline the Zimbabwe Mining and Tax Law Market Briefing 2015 in South Africa where he is expected to clarify the country's empowerment laws.
Enacted in 2008, the indigenisation law requires foreign firms to hand over 51 percent of shares to local partners.
However, there is confusion regarding the implementation of the indigenisation policy as different Zanu PF ministers lack coherence and consistency on how the controversial law should be executed.
Last week, Zhuwao – who is also President Robert Mugabe's nephew - said Zimbabwe will not relax foreign ownership laws in all sectors of the economy.
"The law is there, my role is to implement. I have been given the job. The job is not to debate whether the law is good or bad. The law is there, that's it. Economic empowerment of Zimbabweans is non-negotiable," he said.
But in August this year, then Indigenisation minister Christopher Mushowe said the law would only be mandatory in the mining sector, which generates half of Zimbabwe's export earnings and contributes about 17 percent of gross domestic product.
"Foreign investors in other sectors would be able to negotiate with the government what proportion of their businesses they could sell to locals," he said then.
"The only area where we do not entertain negotiations is mining, because as indigenous Zimbabweans, our contribution is the (mineral) resource.
"In other sectors, proposals are considered case by case. We are saying to the investors, if you come, your investment is safe, but we encourage you to partner locals," he added.
The southern African country is struggling to recover from a catastrophic recession that was marked by billion percent hyperinflation and widespread food shortages.
Foreign investors say the Indigenisation and Economic Empowerment Act is the biggest obstacle to investing in the mineral-rich country.
However, Mugabe has defended the law, saying it aims to redress colonial-era imbalances.
International mining firms such as Anglo American Platinum and Impala Platinum Holdings operating in Zimbabwe have previously expressed reservations with complying with the empowerment law.
Zimbabwe has the second largest reserves of platinum and chrome, but has lagged behind neighbours like Mozambique and Zambia in attracting foreign investment largely due to Mugabe's economic empowerment drive and high political risk.
Outside mining, foreign investors are interested in Zimbabwe's manufacturing and tourism sectors and infrastructure projects like power generation, but are often discouraged by the indigenisation law and red tape.
Zimbabwe has halved this year's growth target to 1,5 percent while labour unions say more than 60 000 workers have lost their jobs in the past five months as firms close due to power shortages, high cost of capital and competition from cheaper imports.
Meanwhile, the conference to be held on October 28 and 29, in Johannesburg will also discuss the Zimbabwe Draft Minerals Policy, the Mines and Minerals Act (Chapter 21:05) and the review recommendations as well as the country's economic growth prospects.
Enacted in 2008, the indigenisation law requires foreign firms to hand over 51 percent of shares to local partners.
However, there is confusion regarding the implementation of the indigenisation policy as different Zanu PF ministers lack coherence and consistency on how the controversial law should be executed.
Last week, Zhuwao – who is also President Robert Mugabe's nephew - said Zimbabwe will not relax foreign ownership laws in all sectors of the economy.
"The law is there, my role is to implement. I have been given the job. The job is not to debate whether the law is good or bad. The law is there, that's it. Economic empowerment of Zimbabweans is non-negotiable," he said.
But in August this year, then Indigenisation minister Christopher Mushowe said the law would only be mandatory in the mining sector, which generates half of Zimbabwe's export earnings and contributes about 17 percent of gross domestic product.
"Foreign investors in other sectors would be able to negotiate with the government what proportion of their businesses they could sell to locals," he said then.
"The only area where we do not entertain negotiations is mining, because as indigenous Zimbabweans, our contribution is the (mineral) resource.
The southern African country is struggling to recover from a catastrophic recession that was marked by billion percent hyperinflation and widespread food shortages.
Foreign investors say the Indigenisation and Economic Empowerment Act is the biggest obstacle to investing in the mineral-rich country.
However, Mugabe has defended the law, saying it aims to redress colonial-era imbalances.
International mining firms such as Anglo American Platinum and Impala Platinum Holdings operating in Zimbabwe have previously expressed reservations with complying with the empowerment law.
Zimbabwe has the second largest reserves of platinum and chrome, but has lagged behind neighbours like Mozambique and Zambia in attracting foreign investment largely due to Mugabe's economic empowerment drive and high political risk.
Outside mining, foreign investors are interested in Zimbabwe's manufacturing and tourism sectors and infrastructure projects like power generation, but are often discouraged by the indigenisation law and red tape.
Zimbabwe has halved this year's growth target to 1,5 percent while labour unions say more than 60 000 workers have lost their jobs in the past five months as firms close due to power shortages, high cost of capital and competition from cheaper imports.
Meanwhile, the conference to be held on October 28 and 29, in Johannesburg will also discuss the Zimbabwe Draft Minerals Policy, the Mines and Minerals Act (Chapter 21:05) and the review recommendations as well as the country's economic growth prospects.
Source - dailynews
