Govt to prosecute empowerment fronts

HARARE - Government will prosecute Zimbabweans fronting in empowerment deals, Indigenisation minister Francis Nhema said.

This comes amid reports that some locals are conspiring with foreigners in the crafting of indigenisation compliance proposals, resulting in the latter remaining major shareholders of Zimbabwean firms.

Zimbabwe’s indigenisation policy compels foreigners to cede 51 percent shareholding to black locals.

Nhema said while government does not impose or recommend local partners for the foreigners, there were several cases where locals had been bribed to front in empowerment transactions.

“Locals should not accept these bribes as they are blocking government’s initiative to empower them,” he told a National Business

Council of Zimbabwe symposium on Monday.

“When you enter into a deal with foreigners, make sure you are a genuine partner,” he said.

“When these deals are brought to us we vet and investigate the partners and in most cases we have discovered that some of these so-called partners do not even understand the stipulations of the deals,” Nhema said.

He added: “A certain woman whose name I will not mention was given $10 000 by a Chinese national to pose as a partner in a deal. When she came for the vetting process… she admitted she had accepted money from the Chinese national,” Nhema said.

Nhema said the woman in question, whose name he could not disclose, had been released but the “rest of the culprits will not be lucky”.

“Government will in the future arrest such individuals as they are auctioning away its empowerment efforts,” he said.

While market analysts argue that the indigenisation policy is among the factors that have rendered Zimbabwe investor unfriendly, government is hopeful that foreign direct investment (FDI) will double within the next five years.

It also expects the country’s economy to grow by an average seven percent per annum in the period.

Government statistics indicate that since 2009, FDI-gross domestic product (GDP) ratio has averaged 15 percent, less than half the target.

According to United Nations Conference on Trade and Development, Zimbabwe’s FDI increased from $387 million in 2011 to $400 million in 2013.

Comments (2)

"Zimbabwe's indigenisation policy compels foreigners to cede 51 percent shareholding to black locals.".... I think this policy/law is discriminatory in an all inclusive Zimbabwe; it needs to be reviewed

Sam - 17 April 2014

Changing names and using big words like GDP, FDI etc will not improve our economy at all. Who the capfits let him wear it for the betterment of our economy. Period

ticharwa - 17 April 2014

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