Mashakada pokes holes into JV Bill

HARARE - Former Economic Planning minister, Tapiwa Mashakada, says government must clarify its position on the threshold of equity between government and a private player in the proposed Joint Ventures Bill.

The Joint Ventures Bill — currently being debated in Parliament — seeks to provide for the implementation of joint venture agreements between contracting authorities and counter parties, creating a legal framework for investments in the country.

The piece of legislation comes in the light of low foreign direct investment (FDI) levels, absence of lines of credit and balance of payments support.

Mashakada told Parliament last week that the country must come up with attractive shareholding structures to lure foreign investments.

“We know we have the Indigenisation and Economic Empowerment Act which stipulates that Government shall retain 51 percent and the investor will retain 49 percent,” he said.

The MDC legislator also asked Finance minister, Patrick Chinamasa, if government was going to stick to the Indigenisation and Economic Empowerment Act or create variations in order to incentivise high capital projects.

The draft JV bill provides for the establishment of a Joint Venture Unit which shall be a department within the ministry of Finance under the control and supervision of the Secretary for Finance.

Mashakada added that government must clarify the distinction between joint ventures where natural resources are concerned from joint ventures based on private equity.

“The other clarification is on tendering. We want to know whether investors who come through the joint venture route will be subjected to the tendering process…

“That is the State Procurement Board system or they will have their own tendering dispensation in order to expedite investments into the country?” Mashakada said.

The Hatfield legislator also said government had to address bottlenecks regarding work permits for the employees to be recruited by the investor; the question of licensing, bureaucratic licensing and red tape, the visa regime that investors are complaining of, the repatriation of capital or dividends.

Chinamasa agreed with Mashakada and said private investments were attracted to destinations where there is confidence, policy certainty and policy clarity.

“It is therefore, critical that government undertakes policy and legal reforms to provide incentives and institutional support that attract private sector participation in the provision of infrastructure services,” Chinamasa said.

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