By Bridget Mananavire
The indigenisation policy, which has been largely blamed for scaring away investors, has exposed government’s confusion and inconsistencies, as President Robert Mugabe last week tasked parliamentarians to amend the law.
The flawed and controversial law has been prone to misinterpretations, with Cabinet ministers routinely at each other’s throats, disagreeing on how to interpret it.
During his speech at the opening of the fourth session of the eighth Parliament on Thursday, Mugabe said the law should be amended so that it becomes clear.
“It will be recalled that I issued a statement to clarify government’s position regarding the Indigenisation and Economic Empowerment policy on April 11, 2016. The relevant Act will thus be amended to bring into consonance with the enunciated policy position,” Mugabe said.
Mugabe, in April, admitted there were conflicts regarding the interpretation of the Indigenisation and Economic Empowerment Policy admitting that it had caused confusion among Zimbabweans, the business community and investors.
Instead of a 51 percent demand from foreign investors, Mugabe said, the policy should approach the three economic sectors — natural resources sector, non-resources sector and the reserved sector — differently.
“As such, in terms of the policy, government and or its designated entities, will hold a 51 percent stake in businesses in the natural resources sector, with the remaining 49 percent, belonging to the partnering investor(s). The need for investors in this sector to comply with the prescribed indigenisation obligations is therefore non-negotiable,” Mugabe said in April.
“Where government does not have 51 percent ownership, compliance with the Indigenisation and Economic Empowerment Policy should be through ensuring that the local content retained in Zimbabwe by such businesses is not less than 75 percent of gross value of the exploited resources.
“Local content here refers to the value retained in Zimbabwe in the form of wages, salaries, taxation, community share ownership schemes, and other activities such as procurement and linkage programmes.
On the non-resource, sector Mugabe said: “based empowerment credits or quotes will be granted to reflect the contribution of investors in such businesses to the national development efforts.
“This will be agreed upon through negotiations involving the relevant line ministers and the private investors. The role of the minister of . . . Indigenisation is to coordinate the activities of line ministries in the implementation of the policy through the relevant Cabinet committee, which he chairs”.
“The banking sector shall continue to be under the auspices of the Banking Act, which is regulated by the Reserve Bank of Zimbabwe, and the insurance sector under the auspices of the Provident and Insurance Act.
“These institutions will, nonetheless, be expected 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.”
During Thursday’s speech, the nonagenarian lamented the country’s economic situation, whose worsening he has been blamed for.
“Our economy faces a number of challenges, which include the subdued aggregate demand, liquidity constraints, high interest rates, subdued foreign direct investment and limited fiscal space.
“This too, is further compounded by low revenue collections arising from depressed production, rampant revenue leakages, as well as poor mineral commodity prices on the global market.
“As a consequence, the economy registered a gradual decline, with the estimated growth rate for 2016 now projected at 1,2 percent.
“Government, in the context of the ZimAsset, is implementing a battery of initiatives to address the prevailing economic challenges,” Mugabe said.
Among the Bills set to be debated by Parliament in this session are the Constitutional Court Bill, Rural District Councils Bill, Traditional Leaders Bill, the Prisons Bill, and the Marriages Bill, Coroner’s Office Bill as well as the Judicial Laws Amendment Bill and the Public Health Bill among others. Daily News