Mugabe clarifies indigenisation

HARARE - President Robert Mugabe yesterday stepped in to clarify the country’s position on the Indigenisation Law after some of his cabinet ministers openly brawled over the implementation of the legislation in the financial services sector.

Mugabe said the conflicting positions on how to implement the country’s black empowerment legislation had caused confusion to potential investors, and needed to be put to rest.

The president said the Indigenisation Law — which has been blamed by economists for the country’s low foreign direct investment (FDI) inflows — was being clarified “for the guidance of government ministers, the business community and current and would-be foreign investors”.

In a statement released by Information minister Christopher Mushowe, Mugabe subtly chastised Indigenisation minister Patrick Zhuwao, who recently undressed Finance minister Patrick Chinamasa for announcing that all players in the financial services sector had honoured the law’s obligations.

Discord reared its head two weeks ago when Zhuwao issued a public statement contradicting one issued by Chinamasa — as the two publicly clashed over compliance in the financial sector to laws that force foreign-owned firms to sell a controlling stake to locals.

Chinamasa announced that all foreign-owned financial institutions operating in the country managed to submit credible indigenisation plans before the March 31 deadline — after Zhuwao had threatened to shut down all companies that failed to submit “credible plans” by April 1.

“…all the affected foreign-owned financial institutions operating in Zimbabwe, namely Barclays Bank, Stanbic, Old Mutual and Cabs, Standard Chartered Bank, Ecobank, BancABC, MBCA Bank have all submitted credible Indigenisation and Economic Empowerment plans before the deadline of March 31, 2016,” Chinamasa said.

Zhuwao later released his own statement slating the Treasury boss’s policy announcements.

Mugabe yesterday said the law distinguished the economy into three sectors, namely; the natural resources sector, non-resources sector and the reserved sector.

He also said in the non-resources sector — including the financial services sector — businesses needed to exhibit “socially and economically desirable strategic objectives” and contribute towards the turnaround and sustainable socio-economic transformation of the economy.

“Such initiatives include beneficiation of raw materials that are extracted in Zimbabwe for the purposes of value addition and exporting, in order to generate the much-needed foreign exchange.

“Transfer of appropriate technology to Zimbabwe for the purpose of enhancing productivity… The creation of employment and imparting of new skills to Zimbabweans as well as granting of ownership and/or employee share ownership for value to indigenous Zimbabweans as may be agreed between an investor and indigenous Zimbabwean partners,” he said.

Mugabe said sector-based empowerment credits or quotas were going to be granted to reflect the contribution of investors in such businesses to national development efforts.

“The role of the minister of Indigenisation is to coordinate the activities of line ministers in the implementation of the policy through the relevant Cabinet committee, which he chairs,” he said.

The president also said the banking sector was going to continue to be under the auspices of the Banking Act, which is regulated by the central bank and the insurance sector under the Provident and Insurance Act.

Mugabe said with regards to the natural resources sector, government was to hold a 51 percent stake in business with the remaining 49 percent belonging to the partnering investors, adding that the need for investors to comply with the prescribed indigenisation obligations was “therefore non-negotiable”.

Mugabe’s intervention also comes after a Zhuwao-backed youth group wanted to march against insurance giant Old Mutual on Monday to disrupt a meeting the group was having at an uptown restaurant.

Comments (11)

Makes sense, although some might debate the 51%.

JSC - 13 April 2016

am sorry cde president my one and only president if this statement with factional undertones is attributed to you on this subject we break ranks,the country has laws and a constitution which you signed,the laws of this country cannot be surbodinate to a banking act,kindly correct this anomaly,only last week you told warvets about freeing the remaining land under the british,now you protect the financial sector which is the last bastion of british colonialism,the land and its contribution to our economy is at the same level as the services provided by these british institutions,must we therefore also say ownership of land is at the discretion of the line ministry?the british dont wish us well and letting them control the nerve centre of our economy is naive,either we reverse the land reform or we continue with the indigenisation thrust,no half measures

truth - 13 April 2016

There is no-sense here. It is reported that Anjin Resources is a 50:50 joint venture between the government of Zimbabwe and China, why yet Mugabe is saying 51:49 is non-negotiable. It has taken long for this debate to be resolved. Why a ministers clashing over interpretation of this policy? Why is it vague, such that the president should chip in when in disharmony? I think lack of clarity in this policy is man-made by thieves to ensure that they use it not to benefit themselves but, to fatten their bellies.

Oliver - 13 April 2016

@NYIKA brothers,no long essays,lets keep it short and straight to the point

jojo - 13 April 2016

Who are these misguided youths and who is their sponsor?

Johno - 13 April 2016

Its sad that we have the likes of "Truth " commenting above. He sounds energetic, but totally misplaced i his view of the financial services sector. Democracy is good, foolishness can be paraded as wise counsel. It appears the President lost courage to confront his nephew and rather chose to make a public statement. He should have reprimanded "muzukuru" at home. A misunderstanding or misguided action of one junior minister should surely not be branded as a misunderstanding of all ministers, even if we have brilliant mature minds such as those of the Finance Minister and The RBZ Governor. Where is our good president missing it??Factions must never be nurtured in any form, they not only destabilize the party and render the President ineffective, they increasingly become a threat to National security.

Mwenyendiani - 13 April 2016

what is the law nhai Truth? the banking act id a piece of legisklation as much as the indeginisation act (or stelaing of grabbing act..whatever you call it). and ys some acts can be sup[erior to thers if they are specific to certain sectors. wake up. what do you refer to as law? yOU ONLY RECIGNISE THE THIEVING ONES?

Lodza - 13 April 2016

what is sad is having the likes of @mwenyendiani who believe in the superiority of the british and suffering from colonial hangover still around in this country,he is obviously ignorant with no idea of the operations of these banks in countries where they are fully compliant with empowerment laws but when it comes to zimbabwe they pretend empowerment hurts their business,either zimbabwe implements indigenisation or discard the policy all together,we cant have half measures,ESAP was a failure coz it was never implemented to the letter,govt circumvented the presciptions only implementing what it wanted,i can never apologise for wanting zimbos to own the means of production in this country,the president gave us land and some of us are farming succesfully whilst the @mwenye see the whiteman as their saviour

truth - 13 April 2016

The right hand does not know what the left hand is doing. So what do you expect from that chaos?

Inyika - 13 April 2016

@Truth. Yu have a very valid point Truth.there must be consistency on policy n law,for all.Crafting laws n policies to suit critics or factions wil nt help at all.Who knows maybe the president did not hear Zhuwawo s side.He maybe pursuaded to change again.Maybe yu will agree wth me now,age is undoing our president.We need a stern leader who will push for correct policies that bring us back to the good nation we were n prosper.

viola gwena - 13 April 2016

The whole law is vague. My son was born in Zimbabwe, so were his parents and grandparents. Does this make him indigenous or not? Noone is prepared to say publicly.

Muis - 16 April 2016

Post a comment

Readers are kindly requested to refrain from using abusive, vulgar, racist, tribalistic, sexist, discriminatory and hurtful language when posting their comments on the Daily News website.
Those who transgress this civilised etiquette will be barred from contributing to our online discussions.
- Editor

Your email address will not be shared.