Golden Sibanda : Senior Business Reporter
THE National Indigenisation and Economic Empowerment Board says foreign firms will get time to work on outstanding areas relating to compliance with indigenisation requirements provided they submit their plans within the stipulated time. NIEEB also said that there had been a notable increase in enquiries from companies seeking to beat the March 31 deadline to submit their indigenisation plans.Foreign owned companies operating in Zimbabwe are required by law to ensure that at least 51 percent of their shares are held by indigenous Zimbabweans or State owned entities.
This law is informed by Government policy designed to empower the previously marginalised black majority and bring them into the mainstream economy.
NIEEB chief executive Mr Wilson Gwatiringa said once a foreign owned company has submitted its proposal detailing its plans to comply or showing compliance, such a company would not need to worry. “Once they do that they are okay because their plan will be under processing.”
“So it is not as bad as is projected in certain sections of the media, which seek to paint the impression that we are shutting down the economy,” the NIEEB CEO said.
Mr Gwatiringa said that there were a number of companies with pending compliance plans that have since been requested to provide more details about their plans.
But there has, in the recent past, been palpable resistance or reluctance by foreign firms to submit indigenisation compliance plans in fulfilment of the law of Zimbabwe.
As the deadline approaches for all foreign owned companies to have submitted plans for compliance, NIEEB said more companies are coming forward with their proposals.
“The March 31 deadline is looming and there has been an upsurge of enquiries from companies seeking to comply ahead of the deadline,” said the NIEEB chief executive.
“Section 5 of the (Indigenisation and Economic Empowerment) Act says the minister will first write to non-compliant firms and allow them to show cause. They will be given time to explain, for instance, that they may not have found the partner with requisite funding for the purchase of equity,” Mr Gwatiringa said.
“So it will be up to us to say okay, we have enquiries or a list of indigenous people seeking such investments and we would therefore suggest that they talk to such people.”
Nonetheless, Cabinet last week directed that line ministries should proceed to give orders to licensing authorities to cancel licences for firms not compliant by April 1, 2016.
Mr Gwatiringa also said, as per directive of Government, NIEEB is working well, hand in glove with Zimbabwe Investment Authority to ensure firms comply with the law.
He said ZIA will play the front office role of receiving and processing investment projects applications, including ensuring compliance with indigenisation requirements. Thereafter, the investors’ investment application will be sent to NIEEB for verification of compliance by the regulator and the issuance of compliance certificate.
Mr Gwatiringa dismissed reports of friction between NIEEB and ZIA over authority and delays caused by references to many different offices for approvals. He pointed out the process flow from ZIA to NIEEB is taking only five days, as the two institutions are aware of the need to improve doing business conditions in Zimbabwe.