HARARE - Government yesterday threatened to shut down foreign-owned firms that do not comply with its indigenisation law by April 1.
“Cabinet has directed that on April 1 all line ministers invoke Section 5 of the Indigenisation and Economic Empowerment Act Chapter 14:33 and act against all non-compliant businesses in their sectors,” Empowerment minister Patrick Zhuwao told a news conference at his Harare offices yesterday.
“It’s either you comply or you close shop.”
Zhuwao said the companies would be given a chance to justify why they had not complied and the line minister would then determine whether the justification constitutes reasonable cause.
“It’s up to the discretion of the line minister to determine on what constitutes just cause and it is really up to the company to say well, the reason we have not been able to comply is as follows, the line minister will then determine whether it is a just cause,” he said.
President Robert Mugabe’s Zanu PF has been pushing a policy that compels foreign-owned companies to cede 51 percent of their local shareholding to indigenous Zimbabweans.
Zhuwao said foreign firms resisting the indigenisation programme will no longer be required to pay non-compliance empowerment levies as earlier stated and will instead be shut down come April 1.
This has again raised questions of policy flip-flops in implementing the contentious law.
Zhuwao said line ministers fully backed the new policy thrust.
“There is not a single line minister in Cabinet who did not approve of this or even raise an issue which they don’t agree with this. There is no inconsistency with what I want to achieve, there is a law and the law is very very clear and I think it’s a fair law,” he said.
“Before the minister cancels a licence, he notifies a company that is not compliant that ‘you are not compliant with the law, is there any reason why your licence should not be cancelled.’
“I am very confident of the ability of the various line ministers to be able to determine what just cause is and what is not just cause.
“And the line ministers will be called to report to Cabinet.”
Zhuwao said the defiance by companies had shown contemptuous disregard for Mugabe and the country’s laws.
“It is 23 March 2016, three months into 2016, and businesses have continued to disregard Zimbabwe’s indigenisation laws, as if daring the president and government to do something about their contemptuous behaviour,” he said.
“The failure to adhere to the laws of our land must attract immediate consequences that must be severe and dire enough to ensure that the law is respected and adhered to.
“Cabinet has also directed that all line ministries must make available to the National Indigenisation and Economic Empowerment Board (Nieeb) a full and comprehensive list of all companies that are licensed to operate within their sectors within a week from March 22, 2016 for the purposes of verifying their indigenous status.”
Critics say the policy has slowed down foreign investment in Zimbabwe, a country that is recovering from economic collapse blamed on a violent land reform programme launched by Mugabe at the turn of the millennium.