Policy review boon for Zim-EU ties

EU Ambassador to Zimbabwe Mr Aldo Dell’Ariccia,

EU Ambassador to Zimbabwe Mr Aldo Dell’Ariccia,

George Maponga in Chiredzi
Government’s review of the indigenisation and economic empowerment policy to facilitate sector-specific implementation of the law could speed up normalisation of Zimbabwe-European Union relations, a top diplomat has said.While touring EU-funded agricultural projects in Chiredzi last Friday, the bloc’s Head of Delegation in Zimbabwe, Ambassador Aldo Dell’Ariccia, expressed optimism that they would lift all sanctions on Zimbabwe when they meet on November 1, 2014 in Belgium.

“The messages that are coming from the Zimbabwean Government at the highest level are really constructive.  We are happy that there is now a realisation that in implementing the indigenisation and economic empowerment policy the one-size-fits-all (approach) does not work.

There is need for Government to respond to the necessities of international capital.

“We are happy that Government is now talking about the need to adapt the indigenisation and economic empowerment policy depending on each specific sector,” Ambassador Dell’Ariccia said.

“The landmark proposal for changes to the empowerment laws will see Zimbabweans owning 100% of their resources and sharing only profits with investors.”

This dovetails with a lobby for Zimbabwe to indigenise its resources instead of seeking to merely indigenise foreign-owned companies.

Information, Media and Broadcasting Services Minister Professor Jonathan Moyo announced the proposals last week.

The Indigenisation and Empowerment Act of 2008 requires all foreign-owned businesses worth at least US$500 000 to cede no less than 51 percent shareholding to indigenous Zimbabweans.

Zanu-PF’s Politburo, in its meeting on Wednesday, is likely to be seized with the proposals, among other key national and party issues.
Government has directed Minister of Youth, Indigenisation and Economic Empowerment Francis Nhema, to work on realigning the law.

Ambassador Dell’Ariccia also said the review augured well for Zimbabwe as it could unlock Foreign Direct Investment and buoy economic turnaround efforts.

“The EU has always been supporting the people of Zimbabwe and of course there are some measures (sanctions) that are there but I am happy to say that there is really progress in alleviating them because of positive messages that are coming from Zimbabwe. We are really pleased by the positive and constructive messages that are coming from the ground and these should help in the restoration of normal ties and corporation between Harare and the EU.”

Government, added Ambassador Dell’Ariccia, should speedily gazette the changes.

The amended policy will be implemented through the Production Sharing Model (PSM), and the Joint Empowerment Investment Model (JEIM).

PSM will see Zimbabweans retaining 100 percent ownership of mineral resources and agricultural land, while sharing production would either be fixed or based on a sliding scale depending on the specific mineral or agricultural product and could be linked to profitability.

Under the model, investors would be allowed to recover their initial capital investment and operational costs before the sharing of production outputs or profits.

With JEIM, Zimbabweans – outside mining, agriculture and some investments in tourism – will enter joint ventures to generate capital to build enterprises they wholly own.

Experts have said Government should redefine the Indigenisation and Economic Empowerment Act to give it clarity and stimulate the economy through synergies with experienced and trustworthy international partners.

The Zimbabwe Agenda for Sustainable Socio-Economic Transformation, whose four clusters – Food Security and Nutrition, Social Services and Poverty Eradication, Infrastructure and Utilities, and Value Addition and Beneficiation – requires US$27 billion between 2013 and 2018.

 

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  • Judas Iscariot

    The Herald is choosing to use words like govt,s review of the indigenisation, rather than call a spade a spade like the Sunday Mail did calling it govt climb down.Originally the plan was for foreign investors to invest their own resources and once their companies are worthy more than$500 000 allow govt to move in and demand 51% of the company,shares there by forcing investors to lose 51% of their investment now foreign investors will get back 100% of their investment and locals will get 100% of their resources some yrs from now.Now investors are nolonger forced to have chiefs on their board of directors some who have never been to school.This explains why the EU is now willing to work with the regime.We can,t have a one fit all economic policy kunge hovhorosi.

    • Cde Mzvinavhu(Prof)

      Please dont dwell on semantics! A climb down implies abandoning , which our revolutionary govt is by no means doing! Changing a route does not mean the the trajectory is over ! We have that in our culture as we used to do during the guerrila warfare ! There is nothing amiss in our trajectory for economic democracy for our govt to relook and craft a win -win approach with stakeholders!
      So the bottom line is that govt policy has not changed , but it is the modus operandi and vivendi being subjected to practical and debatable dynamics!

      • Mhunhu

        Thats what your gvt has actually done. Look at the Essar deal for a clearer pic. Essar will own over 51% of the shares and 80% of the ores.
        You have climbed down even more than SA or Bots.

    • tafamutekwe

      Seems like the EU itself is enmeshed in red tape.The bloc’s member countries have to wait for a collective decision to be made on November 14 on their behalf, when in fact, individually ,they should be in a position to review and take advantage of the favorable new investment opportunities now being proffered by Zimbabwe.

    • Hacha Ndizvo

      When the MDC was attacking this law for its weaknesses the Herald was at the forefront – calling the MDC sell-outs and all sorts of things. Now that the ZANU PF Government has seen the folly of their actions and are doing exactly what they were told to do they are now heroes.

  • Budai pachena

    Ko Look East policy yaramba here, tiri kuvadii mabhunu aya? Kana takundikana ngatibudei pachena pane sugar coating yatiri kuda kuitirwa iyi!

  • Col Nyathi

    Let us just repeal this piece of legislation period. Why should we be moving backwards when SADC is moving forwards. Look at Mozambique and Botswana. Botswana is a classic example of how resources can benefit the ordinary man. Their diamonds are of a poor quality but there are bringing huge benefits to Botswana. Ours are sort of a curse . Proceeds are potentially being siphoned to off-shore accounts and our newspapers should be highlighting this instead of supporting a narrow selfish agenda of the powers-that-be

  • Pia

    This is exactly what The Sunday Mail was saying. This is a MAJOR CLIMB DOWN by the government no matter how the Herald tries to put it across.

  • Mela

    Zanu inenge yakundika.. Ko llok east policy yanyararwa. Vaona ma China aya anotodawo investment kubva kuma Western world. Zanu apa haisi kungobuda pachena, uku ndokunonzi kukundikana chaiko. Atleast the new policies are not as dumb as the previous 51% ownership

  • Chipanga

    Ko Noise yamakaita calling sunday mail names. This is a climb down full stop. Dont use glossy words. Economy is in the slide, look east doesnt work and will not work. China will not bail out clueless countries who doesnt know front from back

  • MNK

    The only thing that works on one size fits all is the condom! Only that and nothing else!

  • Observer

    There is nothing wrong with changing your mind if you decide that your initial perception was wrong.In fact its necessary.Handidzokere shure is for idiots.

  • Mhof Chaiyo

    We are happy that there is now a realisation that in implementing the indigenisation and economic empowerment policy the one-size-fits-all (approach) does not work – did we really need to wait for the EU to tell us this, anhuwee!? This is so embarrassing to say the least. When fellow Zimbabweans mentioned the flaws in the Act, they were labelled sell-outs. Now EU says the same thing, it makes sense! As it now stands, no ordinary Zimbabwean will really benefit from the so-called economic empowerment for rthe next 100 years! Here is another BHP scenario – invest, recoup your investment with some profit and leave!

  • star

    even china needs partners with accountability that is why they are slowing down on financing zim-asset.

  • Robert

    That,s politics. Indigenisation does not work

  • Robert

    Wait until the next election. indigenisation talk will come back.