President Robert Mugabe yesterday came out to clarify the government’s position on the indigenisation policy, and settled the dispute between Finance minister, Patrick Chinamasa and his Indigenisation counterpart Patrick Zhuwao.
In a statement last night, Mugabe made it clear that Zhuwao’s role was merely to co-ordinate implementation of the legislation by line ministers.
The veteran leader admitted the policy has poisoned the country’s business environment.
“This has caused confusion among Zimbabweans, the business community, current and potential investors, thereby, undermining market confidence. The situation has also led to increase in cost of doing business, thus, further weakening the country’s economic competitiveness,” Mugabe said.
He said in the resource sector, government had a sacrosanct duty to ensure they were exploited in a manner that safeguards current and future generations.
“As such, in terms of the policy government and/or its designated entities, will hold a 51% stake in business in natural resources sector, with the remaining 49% belonging to partnering investor(s). The need for investors in the sector to comply with the prescribed indigenisation obligations is, therefore, non-negotiable,” Mugabe said.
He said as far as existing businesses, in which government does not have 51% ownership, “compliance should be through ensuring that the local content retained in Zimbabwe by such businesses is not less than 75% of gross value of 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,” Mugabe said.
Zhuwao last month issued a decree ordering compliance by foreign-owned companies or risk losing their operating licences, resulting in near panic in the economy.
Mugabe literally called on Zhuwao to keep his hands off, the financial services sector.
“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,” he said.
“This policy position is essential for the promotion of financial sector stability, confidence and financial inclusion. 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 programme and such other financial empowerment facilities as maybe introduced by the RBZ.”
Mugabe added that sector-based empowerment credits or quotas would be granted “to reflect the contribution of investors in such businesses to national development efforts” to be achieved through negotiation “involving line ministries and private investors”.
Mugabe settles indigenisation row, burns Zhuwao’s fingers
Author: Richard Chidza