WASHINGTON DC —
Former Finance Minister Tendai Biti has warned that Zimbabwe is entering a period of sustained economic recession as the economy is now in a “structural comatose.”
Responding to remarks by Finance Minister Patrick Chinamasa that government is ready to work on a new indigenization model that will allow some foreigners to control more than a 51 percent stake in companies, Biti said the economy might take more than a decade to fix.
Zimbabwe's economy has been on a downturn for over a decade, with most people living below the poverty line and firms either downsizing or pulling down the shutters.
Zimbabwe has for the past two months recorded deflation in what analysts deemed a further danger sign for the struggling economy.
Economists say the indigenization law and policy inconsistencies have resulted in Zimbabwe failing to attract the much-needed foreign investment.
But while easing the empowerment law, Chinamasa said government will not amend it but allow for flexibility in certain sectors.
Indigenization Minister Francis Nhema is expected shortly to table before cabinet plans to define thresholds and timelines for foreign-owned companies to comply with the empowerment law.
Chinamasa indicated that government will for now let foreigners keep a majority stake in banks as locals have no capital to buy shares.