Lloyd Gumbo Herald Reporter
No foreigner operating in reserved sectors for indigenous Zimbabweans under the Indigenisation and Economic Empowerment Act will be allowed to own more than 49 percent in those businesses, Youth, Indigenisation and Economic Empowerment Minister Francis Nhema has said.
This is in compliance with the Act that prescribes 51 percent ownership by indigenous Zimbabweans.
The provision applies to foreign-run businesses that already operated in those sectors prior to March 25, 2011 when the reserved sectors regulations were gazetted.
To that end, Minister Nhema said new applications in those sectors would be skewed in favour of indigenous Zimbabweans while foreigners would only be considered in critical sectors but on condition that they show commitment to indigenise in the immediate future.
“They (foreign businesses) identify partners of their own and they give us the schedule on how they are going to shed the 51 percent,” he said.
“They will have to indicate to us how those partners would buy the shares. But they must make sure that 10 percent is given to the employees. We want the 51 percent to be availed to a number of indigenous Zimbabweans in the spirit of broad-based empowerment.
“We cannot have an individual taking over all the shares. But if an indigenous Zimbabwean starts a business in those sectors but sell about 30 percent of their shares to a foreigner, we have no problem with that.”
In May this last year, Government said all business operating in reserved sectors – among them agriculture (primary production of food and cash crops), transportation, retail and wholesale trade, barbershops, hairdressing and beauty salons, employment and estate agencies and grain milling – should apply for indigenisation compliance certificates.
The May 17, 2013 Government Gazette read: “Every business that commenced operating in any sector of the economy reserved for indigenous Zimbabweans under the Third Schedule on or after the fixed date shall apply for an indigenisation compliance certificate commencing from the gazetting of these regulations.
“Any person who operates a business referred to in subsection (1) without an indigenisation compliance certificate with effect from January 1, 2014 shall be guilty of an offence and liable to a fine not exceeding level four or to imprisonment for a period not exceeding three months or to both such fine and such imprisonment.”
Earlier, it seemed no foreigners’ applications would be accepted according to the regulations.
But Minister Nhema indicated that no foreigner already operating in those sectors would be pushed out.
Indications are that there was a feeling in Government that pushing out foreigners – mainly West Africans and Asians – operating in these sectors was neither in Zimbabwe’s best interests nor in the spirit of empowerment policies.
Furthermore, President Mugabe has pointed out that indigenisation and empowerment are not solely about taking over foreign business, and – more importantly – involve the creation of home-grown industries.
In line with today’s deadline, businesses operating in those sectors have been flocking to the National Indigenisation and Economic Empowerment Board to regularise their operations.
NIEEB chief executive officer Mr Wilson Gwatiringa on Monday told The Herald that about 800 concerned companies had since applied for compliance certification.