Zimbabwe News and Internet Radio

Zhuwao eats humble pie

By Farayi Machamire

Indigenisation minister Patrick Zhuwao accepted that he “misinterpreted” aspects of the indigenisation policy, adding he respectfully accepted President Robert Mugabe’s policy statement as the new “directive” his ministry would take.

Patrick Zhuwao vs Patrick Chinamasa
Patrick Zhuwao vs Patrick Chinamasa

Mugabe dramatically revised rules compelling foreign firms to transfer majority control to local blacks after acrimony between Finance minister Patrick Chinamasa and Zhuwao over whether or not foreign-owned players in the banking sector had complied with the indigenisation and economic empowerment law.

Chinamasa, upholding a public statement by Reserve Bank of Zimbabwe governor, John Mangudya,  published a statement saying foreign-owned banks were compliant, prompting the Indigenisation minister to promptly and emphatically reject the Finance minister’s statement.

Mugabe then stepped in through an April 11 presidential statement, backing Chinamasa and reprimanding Zhuwao.

“As I take direction, it’s quite possible that I can misinterpret certain things and I must be able to listen to my boss when my boss explains what I have misinterpreted,” Zhuwao admitted at a news conference.

He said Mugabe’s “pronouncement has helped” pacify edgy investors.

Referring to the policy inconsistency from his ministers, Mugabe said:

“This has caused confusion among Zimbabwean, the business community, current and potential investors, thereby undermining market confidence.

“It is therefore fit and proper that I provide clarification on this very vital national policy, for the guidance of government ministries, the business community and current and would-be foreign investors.”

Government, which required foreign firms with assets worth $500 000 to cede 51 percent of their shares to black Zimbabweans within five years, is now proposing to exchange the 51 percent shareholding threshold for value in the form of wages, taxation, community ownership schemes and procurement programmes.

The regulations will no longer apply to existing businesses in the natural resources sector where government does not have 51 percent ownership.

For banks, Mugabe’s statement did not mention 51 percent Zimbabwean ownership at all, but only implored banks “to make their contributions by way of financing facilities for key economic sectors and projects, employee share ownership schemes, linkage programmes and such other financial empowerment facilities as may be introduced by the Reserve Bank.” Daily News