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.