Golden Sibanda Senior Business Reporter
Government has no intention of amending the Indigenisation and Economic Empowerment Act and if need be, the decision would only be communicated through the minister responsible, a senior official has said. Director of Indigenisation in the Ministry of Youth, Indigenisation and Empowerment, Mr Godfrey Sigobohla made the remarks at the two-day Mining and Infrastructure Indaba, which ended in Harare yesterday.
Mr Sigobodhla made the comments in response to enquiries from delegates seeking clarity on recent reports that Government intended to amend the equity laws. “There are no intentions to amend the (indigenisation and empowerment) law. Should such a decision be made, the minister responsible (Francis Nhema) will make the necessary announcements,” Mr Sigobohla said.
In terms of the Indigenisation and Economic Empowerment Act, foreign owned companies are compelled to dispose, for negotiated value, at least 51 percent of their equity to indigenous investors or institutions.
The Act is supported by sector-specific regulations detailing the compliance requirements for each sector, but requires mining firms with minimum equity value of $1 to submit an indigenisation compliance plan.
The belief that Government was working on amendments to the equity laws was recently inflamed when Finance Minister Patrick Chinamasa, in his mid-term fiscal policy statement, said Government would make clarifications around the Indigenisation Act.
Minister Chinamasa said the seemingly contradictory interpretations over the Indigenisation and Economic Empowerment policy had nurtured negative country perceptions undermining potential investment into the country.
“This is notwithstanding that the guiding legal framework actually provides for sector specific indigenisation and empowerment policies,” the minister said.
Zimbabwe received $400 million in FDI last year. Minister Chinamasa said that the Act was not meant to scare off investors, but to foster mutually beneficial partnerships with them to guarantee security of investments.