Zimbabwe has announced new indigenization regulations that give foreign-owned companies the right to part with less shares than the feared 51 percent previously demanded by the government.
Youth and Indigenization Minister Patrick Zhuwao made the announcement in Harare on Monday, almost a week after the government, through Finance Minister Patrick Chinamasa, gazetted the new regulations.
Zhuwao told journalists that the new indigenization frameworks are designed to be in line with the country’s economic blue-print – the Zimbabwe Agenda for Social and Economic Transformation or Zimasset.
The new rules stipulate that line ministries will now play a critical in the indigenization process with the Zimbabwe Investment Center handling all investment applications in order to accelerate the ease of doing business in the country.
An indigenization levy that takes into account a rebate scoring system has been introduced under the new regulations that encourage indigenization in the form of economic empowerment credits.
“These frameworks procedures and guidelines have been developed in line with the Zimbabwe Agenda for Sustainable Socio-Economic Transformation to give added impetus towards compliance with the indigenisation and economic empowerment legislation and to give effect to His Excellency, President R.G Mugabe’s pronouncements of 12 December 2015.
“This represents an important milestone in the transformation of the economy in line with the Zimbabwe Agenda for Sustainable Socio-Economic Transformation, the 10 Point Plan enunciated by His Excellency, President R.G Mugabe and the Rapid Results Approach Framework.”
He added that “now that we have clarified the position we do not expect any affected companies to remain defiant and non-compliant.”
According to Zhuwao, models that allow for achieving the objectives of ZIMASSET and the 10 Point Plan within the legislative framework of the Indigenization and Economic Empowerment Act will be developed in consultation with the appropriate line ministries.
“Stakeholders are urged to engage with the respective sector ministries for input towards the development of the said models or if they encounter any difficulties.”
He said the legislation is robust and comprehensive enough to provide several possible pathways that businesses may adopt to achieve compliance and thereby enhancing investments and production across all sectors of the economy.
“The frameworks provide for two possible pathways for ensuring compliance, namely compliance through provision of a lesser share of indigenisation for the economic empowerment of indigenous Zimbabweans; or implementation of the Indigenisation Compliance and Empowerment Levy that takes account of the rebate scoring system.”
Zhuwao further noted that the frameworks emphasise that ZIA will be receiving all applications in order to accelerate the Ease of Doing Business as well as the operationalization of the One Stop Investment Centre in line with the Rapid Results Approach Framework.
Zhuwao and Chinamasa were not available for comment as their mobile phones were not reachable.
Independent economic Rejoice Ngwenya told VOA Studio 7 this is a positive government move meant to boost investment in the country.
Studio 7 also spoke to Dr. Godfrey Kanyeze who says the government should have consulted all stakeholders when crafting the new regulations.