New indigenisation policy on cards

THE Government has started the process of formulating a new law to replace the Indigenisation and Economic Empowerment Policy, which has been deemed to be frustrating efforts of luring foreign investors to invest in the country.

In an interview with Sunday News Business on the sidelines of a stakeholder consultation meeting on the principles of the Economic Empowerment law in Bulawayo last Wednesday, Director of Legal Services in the Ministry of Industry and Commerce, Mr Never Katiyo, said the new policy was aimed at improving people’s livelihoods and enhancing industrial growth.

“As you are aware that the Consumer Protection Act is now a law and these measures by Government are meant to improve the lives of the people. If you look at our industries, although there are challenges affecting them they are producing quality products, which are doing well in export markets. So, as we go on with this consultation, we hope to take such issues into consideration,” he said.

Mr Katiyo said the new policy would also seek to improve the Ease of Doing Business in the country.

“The word indigenisation was misunderstood by some sections and ended up creating certain perceptions and Government was quick to come in and amend the Indigenisation and Economic Empowerment Act through the Finance Act to then come up with a framework policy. However, it was not a shift as such, it was just relaxing some of the provisions there to accommodate investors, be it local or international so that we go towards ease of doing business, the whole thrust is to drive towards ease of doing business,” he said.

Following the coming in of the Second Republic in November 2017, it has been observed that Zimbabwe was failing to attract investors from across the world in different sectors of the economy largely due to the restrictive nature of the Indigenisation and Economic Empowerment Act.

Before it was amended, the Act stipulated that foreign investors should hold a maximum of 49 percent shareholding with 51 percent stake reserved for locals. The Government has adopted the “Zimbabwe is open for business” mantra and through the Ministry of Foreign Affairs and International Trade, the country has embarked on a re-engagement drive with the international community to thaw relations.

“The 51-49 percent ownership policy created its own share of controversy and Government had a shifting policy on that one and we now have to consolidate. There is a burning issue, the Community Share Ownership Trust and the constitution provides for benefits for those who extract resources from a local community. So, we want to formulate preferable ways on how best we implement it so that we don’t strain companies at the same time we also want our communities to benefit from their own God-given resources,” said Mr Katiyo.

A number of people who spoke during the meeting said there was a need for Government to expedite the enactment so as to speed up the process of attracting Foreign Direct Investment into the country.

“If Government is committed to see this country grow, it must make sure that this law attracts investors. The Government should make sure these investors are genuine and will bring business and opportunities,” said a Bulawayo resident, Mr Dickson Nleya.

A representative of the Small to Medium Enterprises in the furniture manufacturing sector Mr Kenneth Sithole said the country should emulate other countries that have successfully implemented such a law and guard against investors that seek to plunder the country’s resources.

“We applaud the Ministry of Industry and Commerce officials coming to the people and talk business but, let us follow what countries like Rwanda and Ethiopia have done to attract investment. Our country can benefit. We just have to guard against exploitation of Zimbabwe’s resources and labour,” he said.