Indigenisation policy hostile to investors: Mashakada

THE current indigenisation policy is incompatible with Zimbabwe’s investment attraction drive and must be revised, a Cabinet minister has said.REPORT BY OUR STAFF
Economic Planning and Investment Promotion minister, Tapiwa Mashakada’s remarks come in light of reports that South African companies were closely monitoring their assets in Zimbabwe.

 
The companies are said to be “quietly” preparing to contest a government move that forces disposal of shares to Zimbabweans under the indigenisation policy.

 
South African companies with significant material exposure in terms of operations in Zimbabwe include Pretoria Portland Cement, Zimplats, owned by Implats and worth more than US$24 million, Tongaat Hulett, with sugar operations, wholly owning the Triangle Sugar operation and a 50,3% holding in Hippo Valley Estates.
Others include Standard and Nedbank which operates MBCA in Zimbabwe.

 
“Any policy is subject to changes, this (indigenisation) policy is not cast in stone. There are two options that government can explore. First, there is need to review thresholds with a view of lowering them in line with recommendations from sectoral committees,” he said, adding that the recommendations made were already being assessed.

 
“Secondly, there may be a need to temporarily suspend the policy which would facilitate much-needed FDI (Foreign Direct Investment) inflows and provide local industry with sufficient time to grow and recapitalise,” he said.

 
Zimbabwe’s return to political and economic stability three years ago, following the inception of the inclusive government attracted investors’ attention regionally and internationally, as they increasingly sought to advance their capital into emerging markets.

 
However, policy inconsistency has proved to be the bane of anticipated economic growth, as treasury recently revised projections downwards.

 
Government signed and ratified a number of Bilateral Investment Promotion and Protection Agreements (Bippas) with other countries, but the indigenisation policy which dictates that foreigners should cede 51% of their investments to locals has caused consternation within the investment community.

 
Under the indigenisation policy, South African companies holding considerable assets in Zimbabwe have been told to come up with a plan to dispose of 51% of them to Zimbabweans or face confiscation.

 

 
However, Mashakada said the bilateral agreement between Zimbabwe and South Africa would protect investors’ interests.

 
“The South Africa-Zimbabwe Bippa is still in full force and will be used as a basis of government’s commitment towards protecting investors’ interests,” said Mashakada.

 
The existing ratified bilateral investment treaty clearly prohibits the expropriation of South African assets in Zimbabwe.

 
The treaty allows parties whose interests have been violated to appeal to international dispute resolution centres at multilateral bodies such as the United Nations, in order to obtain recompense against any confiscation.

 
Youth Development, Indigenisation and Empowerment minister, Saviour Kasukuwere, said although he had not heard of any particular cases, the indigenisation policy would continue to subsist.

 
“Well, they can go ahead (and contest). The Bippa is very clear, but we are entitled to our rights as a sovereign nation. They can’t just say they would use the Bippa to undermine our rights,” he said.

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4 Responses to Indigenisation policy hostile to investors: Mashakada

  1. terrence t. Bhebhe September 24, 2012 at 9:04 pm #

    the whole idea of luring investors only works with good legislature not the crazy draconian laws we have. Zanupf must go. We are tired of being unemployed.

  2. Samson Ndlovu September 26, 2012 at 5:44 pm #

    Let us look for undisputed inheritances.

  3. Admire September 28, 2012 at 8:05 am #

    The thing here is hapana asingadi pfuma, we the black Zimbabwean were disadvantaged, this indeginasation is set to adress that there is no two ways about it, the question is how? economists of this country including indepentent ones should be giving us better ideas of hw to do it to avoid chaos, guyz to be rich is glorious bvunzai Strive, Nyambirai and others kuti mari inonaka sei, this not about zanu its about money and wealthy to us, what we just need is a sustainable way of going about it

  4. Mugerandebvu September 28, 2012 at 10:55 pm #

    What needs to go is the Zimbabwean culture of dependency which has been perpetuated over the years since independence when the donor community poured in their assistance, some as sincere well-wishers and others doing so as bait.

    Its a fact that some people from both sides of the political divide are patrons of that dependency culture and that is reflected by the various reports of impropriety we read and hear about every day.

    Frankly speaking, the UDI regime was able to hold-out for as long as it did while under full-blown sanctions because it had to rely on itself for the most part and then on the support of the apartheid regime across the border. Import substitution spurred their industry into a credible survival mode that squeezed out any opportunity for a dependency syndrome to creep-in.

    All of that was washed out after independence when donor funding started arriving and an entitlement mentality took shape and we became psyched up for two alternatives, donor-fishing or creditor-hunting and in either scenario, the final outcome converged on eventually not sweating to get anything.
    The insatiable hunger for instant gratification has continued unabetted and it permeats every strata of our society from top to bottom. That is why we have graft committed with impunity by those in high offices while at the bottom level we have touts daily harvesting earnings higher than those for commuter operators and everything appears as if normal.

    The mother of all ironies is that we all know about it and the best we prefer is hold countless conferences and float excellent resolutions, get merry and then archive it all and throw away the keys.

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