The Zimbabwean cabinet has directed Minister of Indigenisation and Economic Empowerment Francis Nhema to realign the indigenisation and empowerment laws with government policy that land, minerals and tourism be owned 100% by Zimbabweans. This was revealed by Minister of Finance and Economic Development Patrick Chinamasa in response to a question in the House of Assembly.
“The President has said the indigenous policy is intended to advance our control over the resources. These resources are land, minerals and tourism. We are basically saying we have 100% of our resources,” said Chinamasa. According to a report by the Financial Express, Chinamasa said sectors outside the three would also be included in the act, as government wanted to ensure locals participated in mainstream economic activities. Nhema is expected to present papers to his party’s politburo, where a new policy would be formulated as a way of seeking to strengthen the law and not weaken it.
Chinamasa said the realignment of the law would also remove discretionary power placed in the hands of officials to curb corruption. “Underlying the realignment is the removal of discretionary powers given to officials to curb corruption and ensure people are guided by the law,” said Chinamasa. He said the amended indigenous law will take into account that investors expect to reap returns on their investment. “It is important to recognise that investors don’t come here for charity, so it is incumbent on us to create the necessary investment. The paper that Minister Nhema is working on will regulate how we share the fruits with investors. Investors are welcome from the North, East or West,” said Chinamasa. Meanwhile, Nhema said the fundamental principle underlying implementation of the indigenisation and economic empowerment legislation was that the law provides that any equity being disposed of to indigenous investors shall be disposed of for value at mutually agreed terms.
Government was not involved in these discussions regarding commercial aspects of any transaction. “Therefore, if an investor brings in $100m, the indigenous parties do not take away $51m from the foreign investor, but are expected to inject their own capital amounting to 51% of the business.” Speaking at the Institute of Chartered Accountants of Zimbabwe Chief Finance Officers’ Forum on Tuesday, Nhema emphasised that government did, and will not impose indigenous partners on foreign investors.
According to NewsDay Nhema expressed concern over the current indigenisation debate, saying it was being discussed through inappropriate channels. He was responding to media reports quoting Information Minister Jonathan Moyo as saying the government was in the process of reviewing the indigenisation and empowerment policy. This is with a view of putting emphasis on the Production Sharing Model (PSM) and the Joint Empowerment Investment Model (JEIM) as the two vehicles through which the indigenisation policy would now be implemented.
The PSM is a broad cover for an assortment of production sharing agreements signed between the government and extraction companies. It concerns how much of a resource extracted from the country each will receive. Under JEIM, outside mining, agriculture and particularly tourism investments, indigenous Zimbabweans will be encouraged to enter into joint ventures as a way of generating capital to build wholly-owned Zimbabwean enterprises.