OVER the last few weeks there has been robust debate over the Frameworks, Procedures and Guidelines for implementing the Indigenisation and Economic Empowerment Act. In fact it is important to note that there has never been varying positions on the law as some opposition voices have tried to portray, but only discussion which is healthy in any democratic state.
We applaud the Ministers of Youth, Indigenisation and Economic Empowerment and Finance and Economic Development for showing that working together is a key pillar of our Government. It is our considered view that such unity of purpose is critical if we are to attain our levels as a leading economic powerhouse in Africa.
In our view, indigenisation and economic empowerment must be approached with a forward looking lens and be seen as being a means for enabling people, particularly the youth to start and efficiently run future businesses in various economic sectors, with the sufficient skills-set.
Minister Patrick Chinamasa summed up the huge step that Government has taken by clarifying the Indigenisation and Economic Empowerment Act. At the joint announcement of the Frameworks, Procedures and Guidelines for implementing the Indigenisation and Economic Empowerment Act, Minister Chinamasa said this was the “last policy requiring clarity”.
For some years investors and the business community wanted Government to publish the Frameworks, Procedures and Guidelines for implementing the legislation so that they can comply. The frameworks make clear some issues that were being highlighted as grey areas.
For instance, Minister Patrick Zhuwao announced that companies that are compliant with the indigenisation law will be exempt from paying an Indigenisation Compliance and Empowerment Levy.
Furthermore, companies that are compliant will benefit from an indigenisation rebate. We note that this clarification is critical in so much as it gives existing businesses confidence to operate in Zimbabwe. It gives potential investors fresh impetus to consider Zimbabwe a suitable investment destination.
When companies make decisions whether to invest in a country they consider a number of factors including the external environment. They conduct what is normally referred to as a PEST analysis which includes analysing the political, economic, social and technological factors. An extension of the PEST analysis includes the regulatory environment.
If the regulatory environment is not clear and consistent, business finds the country unfriendly for investment. Therefore, what Government has done with clarifying the Frameworks, Procedures and Guidelines for implementing the Indigenisation and Economic Empowerment Act is to send clear signals to the business community and investors at large that Zimbabwe is ready to do business. The Reserve Bank of Zimbabwe Governor Dr John Mangudya said the policy is market friendly and this makes Zimbabwe open to investment.
We tend to agree with the learned Governor.
For inasmuch as we are aware that we are a sovereign nation, we also understand that we do not live in isolation.
However, having a good law does not necessarily mean milk and honey will flow in our streets tomorrow. There is work to be done if the law is to translate into positive gains for the people. We, therefore, call upon the implementing authorities to ensure that implementation of the indigenisation law is done orderly and speedily in accordance with the Frameworks, Procedures and Guidelines. We note that the guidelines say that the first port of call for compliance and for new investment is the Zimbabwe Investment Authority.
This justifies our call for the speedy reform of ZIA including the creation of the One-Stop-Shop. Questions that arise would include whether ZIA is ready to receive such Indigenisation Implementation Plans by March 31?
Is ZIA equipped with both the human resources and technical capacity to carry out its central role?
The new frameworks set March 31 as the date by which companies should have submitted to ZIA their Indigenisation Implementation plans as required by the Act. ZIA is required to consult with the line ministries and the National Indigenisation and Economic Empowerment Board. This makes ZIA central not only to the investment drive, but also to the indigenisation of the economy.
Companies would not want to wait for eternity for the processing of their Indigenisation Implementation Plans. Government must look into this.
The clarification and simplification of the indigenisation legislation should, however, not be read in isolation with other major developments in the country. It is part of a bigger scheme by Government to ensure that we improve the Doing Business environment. Indeed with such policy clarity we are on the right track.