Amend indigenisation law to capture rethink: MDC

HARARE - The government’s policy rethink in its plan to force all foreign-owned companies to sell or cede 51 percent of their assets to black Zimbabweans must be effected through legislative amendments, an opposition official said yesterday.

Tapiwa Mashakada, the MDC’s shadow minister of Industry, told a news conference at Harvest House, the MDC headquarters in central Harare, that the ruling Zanu PF government’s marked change in approach to the indigenisation policy must see changes in the 2008 law that requires all foreign firms, including mines and banks, to have majority control by local blacks.

He said it was not enough to simply clarify that the policy was not cast in stone, saying investors find confidence when issues were put on record.

“Even the clarifications (President Robert) Mugabe made will not work as long as the policy is still on our statutes,” Mashakada said. “Such bad policies need to be revisited and the 51 percent threshold has to  be scrapped from our statutes if Zanu PF is serious about reviving the economy and to create the 2,2 million jobs it promised.”

He spoke after Mugabe and several ministers made a departure from the brash and aggressive style pushed by former Indigenisation minister Savior Kasukuwere, ruling out a one-size-fits-all indigenisation approach.

“In the implementation of the indigenisation programme, there has been some confusion,” Mugabe said during celebrations marking 34 years of independence from colonial rule.

“We have said where the companies have been established mainly on the basis of natural resources, mining, agriculture, manufacturing, we demand that Zimbabwe either through government or through our people should have 51 percent and not less than 51 percent.

“But if a company establishes itself and is getting raw materials from outside and the raw materials are not from here in Zimbabwe, take the case of aluminium, we don’t have raw materials of it; if the raw material comes let’s say from Tanzania, which has it, and the company establishes itself here in Willowvale, we cannot demand 51 percent, we can negotiate with the company on what percent we shall have.

“If a company establishes itself using raw materials sourced from outside the country, we will share.

“We cannot demand 51 percent because we don’t have materials. These materials have come from outside and the machinery is also coming from outside and therefore we don’t have a basis to demand 51 percent.”

Mugabe’s independence day statement  seemed to resonate with retired Reserve Bank of Zimbabwe governor Gideon Gono who has been vocal in his opposition to a “one-size-fits-all” approach to the indigenisation programme.

The MDC deputy secretary-general, who also doubles up as acting treasurer-general, said the phobia that gripped investors when the law was promulgated would not go away without legislative changes. He said the policy “remains the elephant in the room.”

There has been confusion both in Zanu PF and government, with senior officials sending conflicting signals on the indigenisation policy.

Finance minister Patrick Chinamasa on Tuesday said the financial services sector was exempt from the 51 percent threshold, saying it was not government policy to grab shares when foreigners invest their money. He said foreign investors were free to choose “their own local shareholders”.

He was speaking after Mauritius-based AfrAsia Holdings Limited (AfrAsia) pumped $20 million into its local subsidiary, ramping up its total investment to $100 million, in the process increasing its shareholding to 62,5 percent from 36 percent in a move that flies in the face of the 51 percent threshold.

“I have indicated in private discussions with investors that what is sometimes peddled that you bring in your $20 million and we take 51 percent of that is nonsense and let it go out that it is nonsense,” Chinamasa said.

“We are comfortable with the dilution of shares as, at present, our local people do not have the capacity to buy the shares.

“Minister Nhema will soon present to Cabinet a model to accommodate this as there is no one-size-fits-all. The indigenisation exercise and threshold should be approached on a sector by sector basis.”

However, Information minister Jonathan Moyo told the State media that it would be irresponsible for the government to tinker with a “winning policy” that guaranteed its win in the July 31 polls.

“Economic empowerment and indigenisation is a winning policy and it is irresponsible for anyone, for some of us to want to present it as propaganda for election purposes. That is irresponsible,” Moyo said.

“It’s also a misunderstanding of the guidance we have received from the president, the party, the ideology and policy of the party and, most importantly, the law.”

Mashakada said such policy inconsistencies together with corruption were the root causes of the economic problems confronting the country.

He said without a proper legal framework in place, even the        $6 000 salary caps for directors and mangers of public enterprises would be pie in the sky.

“If it (the salary cap proposal) does not come to Parliament for us to debate, to give it the legal impetus, then we are not serious about what we want to achieve,” Mashakada said. “It takes honest people and a hint of love to turn around the economy.”  

 

Comments (6)

Well said my brother! The time for rhetoric is gone. One hopes the sounder element in Zanu PF prevails.

Ndaneta - 25 April 2014

Well said brother but who cares?Winning an election albeit unfairly is what matters.TIRIKUTONGA !! Zvezhara kana kushaya mabasa ndezvenyu izvo!! Inga wani mazvi jaira ISU TIRIVEROPA CHETE !!! HATI SHAYI HOPE NENHAMO DZENYU....

Nyamamusango - 25 April 2014

Well said brother but who cares?Winning an election albeit unfairly is what matters.TIRIKUTONGA !! Zvezhara kana kushaya mabasa ndezvenyu izvo!! Inga wani mazvi jaira ISU TIRIVEROPA CHETE !!! HATI SHAYI HOPE NENHAMO DZENYU....

Nyamamusango - 25 April 2014

Well said brother but who cares?Winning an election albeit unfairly is what matters.TIRIKUTONGA !! Zvezhara kana kushaya mabasa ndezvenyu izvo!! Inga wani mazvi jaira ISU TIRIVEROPA CHETE !!! HATI SHAYI HOPE NENHAMO DZENYU....

Nyamamusango - 25 April 2014

Of course ZANU PF will never remove the 51% indigenous laws from the statutes. The laws are part of their vote-capturing gimmick. Of course, Nikuv always fills in the other gap given that ZANU PF voters are around 200 000.

Bigman Mukadota - 25 April 2014

Well its a step in the right direction, with God's guidance we will make it.

John Mafu - 25 April 2014

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