Zimbabwe’s Youth, Indigenisation and Empowerment Minister Francis Nhema is satisfied with results of the Indigenisation and Economic Empowerment Act since its inception, saying investors are now warming up to the act and consulting in good faith. “Most investors coming to my office are no longer questioning or concerned about the indigenisation act, they now need assurance and consistency to the effect that if it’s 30% it remains there.” Nhema said investors were worried about consistency rather than existence of the law. “The issue raised by most investors has been about consistency. It is not about indigenisation,” he said, adding that there was need for the country’s government to be consistent so that investors will come knowing what to expect and not get surprises.
He said the law was aimed at improving the standards of living for Zimbabweans by ensuring that they could afford to have basic meals, good health and education as well as creating employment. “The law was not meant to be vindictive or discriminatory,” he said. Nhema called for dialogue on matters that investors did not understand. He said they needed to have confidence so that they could make informed budgets for long-term investments.
Nhema maintained that empowerment laws are strict on investment in natural resource sectors, where the 51-49% threshold is not negotiable. “I have said there won’t be a one-size-fits-all approach and I am working on that. I cannot pre-empt the details but once ready they will be communicated through formal channels,” he said. Nhema said the ownership thresholds were not the only way in which foreign-owned business could comply with the empowerment laws.
Listing on the stock exchange or implementation of programmes which empower local communities are also acceptable forms of compliance, he said. He said the government offers a variety of incentives which could be negotiated separately for investment in different sectors of the economy.
By end of December last year, at least 1 471 companies had complied with the indigenisation law while 700 had been certified in the reserved sectors, which are set aside for locals only.