Zimbabwe is seeking to clarify the divisive indigenization law following internal and external pressure as the country struggles to attract foreign investors.
Under Zimbabwean law, foreign and white-owned companies with assets of more than $500,000 must cede or sell a 51 percent stake to black nationals or the country’s National Economic Empowerment Board.
On Monday, Finance Minister Patrick Chinamasa and Indigenization Minister Patrick Zhuwao, who had been clashing on the implementation of the law, addressed a joint press conference to introduce new measures and put a March 31st deadline for all foreign companies to submit their indigenization plans.
The government has also introduced an Empowerment Levy, with companies that have a large foreign shareholding paying a greater amount.
The new guidelines outline reserved areas for investment by locals and these include retail, agriculture, bakeries, advertising agencies, cigarette manufacturing, milk processing and fuel retailing, among others.
The government has also backed down from its earlier position, which rejected empowerment credits and corporate social responsibility as part of the measures through which to achieve black economic empowerment.
In the resource-based sectors like mining, government said there is no compromise as state entities are entitled to get a 51 percent stake. In an exclusive interview with VOA Studio 7’s Blessing Zulu, Zhuwao said the new regulations are very clear.
Studio 7 also reached former Finance Minister Tendai Biti, who is also president of the opposition People’s Democratic Party, who dismissed the gazette regulations as “hot air” aimed at hoodwinking the International Monetary Fund (IMF).
Last year IMF head of delegation to Harare, Domenica Fanizza, said Zimbabwe will need to clarify its indigenization law as a means of unlocking investments in the southern African nation.
He said, “Clarifying indigenization and empowerment laws is a key measure that Zimbabwean authorities intend to take.
He said the move would help allay investor concerns about the “security of investments and property rights” in Zimbabwe.
Biti noted that Harare must amend the act not introduce cosmetic regulations.