'Indigenisation amendments could fuel corruption'

HARARE - Former Finance minister Tendai Biti says recent amendments to the indigenisation law could exacerbate corruption and create confusion in the implementation of the policy.

Early this year, government gazetted amendments to the empowerment policy — compelling foreigners to cede majority shareholding to black locals — to empower line government ministries to oversee compliance and implementation.

The ministries can also allow time flexibility on meeting the stipulated 51/49 shareholding structure. Biti, however, believes the new amendments are prone to abuse by government officials.

“The tinkering with the Indigenisation and Empowerment Act through the 2015 Finance Act is both a sham and a comedy.

“Asking each potential investor to deal with the relevant ministry is simply decentralising corruption and incompetence,” he said.

More importantly, the opposition MDC renewal team secretary general said there is no defined criteria and standard system that each of the ministries will apply, resulting in greater confusion, arbitrage, distortions and corruption.

“After all, there is no oversight body to monitor the activities of each minister or approve each transaction executed by each ministry.

“As we have said before, the Indigenisation and Empowerment Act as presently formed is predatory, elitist and should simply be repealed,” he added.

Experts say the indigenisation policy is among the major obstacles to attracting foreign capital to Zimbabwe.

Biti said Zimbabwe received less than $140 million foreign direct investment in 2014 while Botswana, Namibia, Zambia and Mozambique received nearly $2 billion each in the same period as a result of investor- friendly policies.

Once the breadbasket of southern Africa, Zimbabwe is now a net importer.

In his 2015 National Budget, Finance minister Patrick Chinamasa said to lure investment, it was up to the government to ensure “consistency and predictability” with regards to its black empowerment law. Last year, Zimbabwe was forced to slash its growth forecast for the year from 6,1 percent to 3,1 percent due to weak economic activity.

“Another characteristic of failure is the huge current account deficit. In 2014 imports were $5,3 billion against exports of $2,4 billion.

This position merely reflects that the productive base has collapsed and therefore, the country has become a large mall for horribly priced South African and Chinese products,” said Biti.

 

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