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Zimbabwe Ministers, Central Bank Governor Fail to Craft Investor Friendly Indigenization Regulations

FILE: Finance Minister Patrick Chinamasa and Agriculture Minister Joseph Made (right). (Photo/Irwin Chifera)

Zimbabwe cabinet ministers and central bank governor fail to agree on revised investor-friendly indigenization regulations.

Indigenization Minister Patrick Zhuwawo, Finance Minister Patrick Chinamasa and governor of the Reserve Bank of Zimbabwe, John Mangudya, met Thursday in Harare and failed to come up with a common position on revising the regulations compelling foreign-owned companies to transfer majority shares to locals.

Indications are that Zimbabwe was supposed to introduce new regulations with less restrictive measures on the transfer of shares to indigenous people.

Investors have over the years been complaining about the black economic empowerment program, which they claim is tantamount to seizing their companies without any form of compensation.

A Zanu PF activist, who only identified himself as Mr. Nyathi, told Studio 7 there is no way that these regulations will be changed to suit foreign investors.

“The state is guided by the Indigenization (and Economic Empowerment) Act and there was no re-evaluation of the act and we are still abiding to that act. The foreign investors should acknowledge (the existence of) Zimbabwean statutes and if they cannot meet the (demands of the) statutes then it’s up to them on whether they want to come or they don’t like to come to Zimbabwe.

He said whoever wants to come to Zimbabwe their investment should meet the required indigenization thresholds.

Gibbs Dube Interviews Mr. Nyathi of Zanu-PF on Indigenization
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Studio 7 also spoke to Rejoice Ngwenya, an independent economic commentator, who said the current indigenization regulations are blocking foreign direct investment.

“They need to send back the concept to the citizens,” said Ngwenya, adding that Zanu PF is becoming too populist with the indigenization agenda.

“This is the problem. (Indigenization Minister Patrick) Zhuwawo has taken a populist position that it’s going to be indigenization or nothing and is fighting against Chinamasa who has been talking about foreign direct investment.

“Yesterday Zhuwawo was saying at Lumumba Center in Epworth we do need foreign direct investment to come and anything for us. I mean these guys, I am afraid, have run out of depth. So, it they remain in their populist stance there is no company that can generate sufficient capital as demand is very low and borrowing is very expensive. The only way is to have international strategic investors.”

Gibbs Dube Interviews Rejoice Ngwenya on Indigenization
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