Investors seek clarity on indigenisation

HARARE - Foreign investors are seeking clarity on Zimbabwe’s indigenisation policy before committing their capital, financial advisory firm Imara Edwards Securities (Imara) said.

This comes on the back of conflicting reports on government’s position concerning implementation of the law — compelling foreigners to cede 51 percent shareholding to locals.

Some reports said government planned to amend the law, shifting from a one-size-fits-all approach to a sector specific one and two options; the Production Sharing Model (PSM) and the Joint Empowerment

Investment Model (JEIM) had been identified as implementation methods.

However, on the contrary, Indigenisation minister Francis Nhema — in charge of implementing the empowerment programme — dismissed the claims.

Recently, president Robert Mugabe ruled out the blanket indigenisation approach, saying only companies utilising the country’s natural resources will be required to immediately turn over majority stakes to indigenous Zimbabweans.

Thedias Kasaira, Imara’s managing director, said “most investors want to see it (amendments to the indigenisation law) in black and white rather than just talks”.

“Our position is that as long as there is no clarity on the law people will continue to doubt,” he said, adding that “but we believe there is nothing really wrong with it as long as it is applied to all in the same way.”

About a week ago, Finance minister Patrick Chinamasa said Mugabe’s Cabinet ordered Nhema to craft a paper clarifying government’s position on the Indigenisation Act.

He said the document would put an end to speculation surrounding the law.

“Cabinet directed the minister of Youth Indigenisation and Economic Empowerment to take up this issue with a view to aligning the law to the policy pronouncements,” Chinamasa said.

“He has been asked to start aligning and clarifying that position,” he said during a question and answer session.

Chinamasa said there will be 100 percent ownership of resources, but hastened to say ownership and control are different things.

“Please do not confuse ownership with control. I have said all our struggles have been to assert our control over resources and that control is 100 percent,” the former Justice minister said.

“What we now do with exploitation of that is a matter of policy. How we exploit our land…and our minerals, which are depleting…, is now going to be a policy issue,” he added.

“What is important is that we want a win-win solution, relationship and arrangements…We are also saying that as they come to make money, using our assets, we also want to reap the benefits of the exploitation of those assets,” said Chinamasa.

Economic analysts have expressed mixed feelings over government’s rethink on the controversial policy.

While some commend the new flexible approach, others feel government should scrap the law.

Analysts say if government casts in stone its vocal promises about making the empowerment law flexible, more investors will feel protected and invest in the country.

Former Economic Planning and Investment Promotion minister Tapiwa Mashakada recently said government’s rethink on the policy must be effected through legislative amendments, “not vocal assurances”.

Netherlands ambassador to Zimbabwe Gera Sneller has also said Dutch investors were ready to come into the country provided government clarifies policies that protect investor interests.

“Investors should have assurance that the same laws valid today will be valid tomorrow and that the same conditions should be applicable across sectors,” she said. — Business Live

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