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Zimbabwe Indigenisation: Pressure mounts on foreign businesses

INDIGENOUS Zimbabweans will soon replace foreigners in economic sectors that are reserved for locals, a senior government official has said.


This comes after the Ministry of Youth, Indigenisation and Economic Empowerment published a statutory instrument (SI 66 of 2013) in May this year, ordering all businesses operating in the country to apply for indigenisation compliance certificates within six months.

Foreign companies trading in reserved sectors of the economy, such as retail and bakeries, have until January 2014 to comply with the laws.

Deputy Minister of Youth, Indigenisation and Economic Empowerment, Mathias Tongofa said the ministry was working with local authorities responsible for issuing licences on the matter.

“We have to deal with other ministries including industry and commerce, because without that linkage we will have difficulties in addressing this issue,” said Tongofa.

“Ultimately, we need to have only indigenous people in the retail sector, that’s the law but currently we are putting in place ways to address this issue. We are not saying we are not going to indigenise but our thrust is for broad-based empowerment using a phased approach,” he said.

The statutory instrument does not permit foreigners to invest in sectors reserved for indigenous Zimbabweans, such as grain milling, barber shops, tobacco processing, bakeries, and local transportation, among others.

“Any person who operates a business in the sectors prescribed under the third schedule without an indigenisation compliance certificate from January 1 2014 shall be guilty of an offence and liable to a fine not exceeding level four or to imprisonment for a period not exceeding three months, or to both such fine and such imprisonment,” a National Indigenisation and Economic Empowerment Board (Nieeb) statement issued earlier this month reads.

Government has previously expressed concern at the influx of foreign investors running small-sized businesses and banking most of the income in offshore accounts.
Government argues that foreign firms should rather streamline investment in large scale capital intensive projects such as infrastructure, energy and mining among others that have downstream local employment creation effects.

Zimbabwe’s Indigenisation and Economic Empowerment Act obliges foreign-owned companies operating in the country to cede at least a 51% controlling stakes to locals.

“Our indigenisation and empowerment should be broad based, it should cater for all who have dropped out of school and those who are marginalised in society so they can have something to do,” said Tongofa.

He said government was planning to support people with skills, especially those who graduate from vocational training centres and those coming from tertiary education sectors, so that they form groups and do sustainable businesses in such sectors.

Zimbabwe’s retail sector has witnessed a formidable presence of foreign nationals mainly Nigerian and Chinese.

They run tuckshops dotted across Harare’s urban landscape selling an assortment of retail products ranging from clothes, groceries, motor spares and electrical parts. Nightclubs and bottle stores are also widespread.

Proponents contend that subsisting legislation that permits foreign investors to participate in retail merchandising as provided for under the Zimbabwe Investment Authority Act should be aligned with the statutory instrument if local empowerment is to take effect.

12 Responses to Zimbabwe Indigenisation: Pressure mounts on foreign businesses

  1. Changlong11 October 27, 2013 at 1:20 pm #

    We cannot wait to run our own show as Zimbabweans in contolling our own economy and destiny. Foreigners must have restrictions on investment locally, you cannot even make a break through to invest in their countries hence why must they dominate us in our land.

  2. fatso October 27, 2013 at 6:37 pm #

    Changlong, although I dont subscribe to the notion that foreigners must invest in every, I nevertheless feel that the foreigners are not the ones forbiding you to start your own business. Even if all foreigners are driven out of Zim, people who think like you may still be stark where they are. Search from withing yoursel and you will see how Zimbos lack business acumen that the Nigerians have.

  3. L. Nyati October 27, 2013 at 7:39 pm #

    Changlong, our industry raazuru ringo pinde nyoka. What are to going to sell and to whom after having bought it at what price and from where???? Where will you get capital and how much rent will you pay or you will erect a tuckshop and how many will you employ, plus tax payments, import duty, transport costs when you say you are a Zimbo importer the costs trebble, ndoo hudofo chaihwo, anyway chimbotapidze midzanga ngezvikari zvemhamba!!!

  4. Machekabuwe October 28, 2013 at 2:37 am #

    Policies enunciated by Mr. Mugabe on land and mineral resources aim to empower indigenous peoples and those resources are the same ones that international capitalist covet for their own enrichment. The international capitalist’s fear is that all Africa will follow Mr. Mugabe’s lead of placing control of such resources in the hands of indigenous people; for sure they are going to put up a fight over those land and mineral policies.

    My wish would be that our people would be empowered with the skills to make full use of the land resource, that agricultural training would be strengthened both through formal training at agricultural colleges and agricultural extension services to farmers on the land. I think agricultural extension services to new farmers are still weak.

    Zviya zvakare zvataiona ana mudhumeni vachidzidzisa zvekurima kumaruwa hazvisati zvapinda kuvarimi vatsva nenzira ine mutsindo. Pakati pevarimi vatsva pane vakabva kumadhorobha, uye vamwe ndivana Saimba/Sahoko vatsva vakabuda kumaruwa kwakanga kusisina minda yaivakwanira; ruzivo rwekurima rwushoma kumapoka iwaya havangaenzaniswe nevaya varimi vagodza makore mazhinji vari pabasa irori.

    • Afana October 28, 2013 at 11:40 am #

      @Machekabuwe, it is hard to see anybody in Africa following Mugabe’s “lead”. There’s just nobody that stupid.

  5. jonh October 28, 2013 at 8:32 am #

    machekabuwe kurima sandi nyore. everyone wants to be a farmer in zim thats the challenge. farming needs expertise kwete kungomara pasi. vanodzidziswa kusvika riinhi varimi ava?

  6. gomo October 28, 2013 at 8:39 am #

    we need to learn a lot from the foreigners

  7. The Truth October 28, 2013 at 1:29 pm #

    Rainflo Technology (Pvt) Ltd Irrigation water reticulation engineers,Consultancy, designs ,boreholes, RAINGUN SPRINKLERS !!overhead irrigation, drip irrigation, pump experts- installation, repairs, trolleys (portable), pivots, pipeline survey and installation, garden irrigation, booster pumps,maintenance,surface irrigation, tanks and tank stands.Thinking Long term & Reducing Costs . 0715415931

  8. Mkhaliphi October 31, 2013 at 6:29 am #

    RGM is not perfect, Mugabe is not & cannot be liked by everyone, but he certainly is not stupid. We all make mistakes, & his weakness is mainly that he never apologises fr his wrongs, but he IS VERY CORRECT ON LAND REFORM & INDEGINISATION! That’s why South Africans fight foreigners and kill foreigners! Indigenous peoples rights must be strengthened & protected. Mugabe has the rare wisdom, but lacks timing. Other people I know will never have guts to introduce such laws

  9. Irikidzayi November 3, 2013 at 3:55 am #

    Agriculture extension must be strengthened so farmers learn new skills and meet to exchange ideas. Those long established norms that guided the beef industry ought to be maintained – it’s no good when farmers kill their breeding stock. In some sub-sectors of the farming industry we lost some institutional memory when the white farmer left the scene suddenly. That is one disadvantage of the fast track nature of the land reform – loosing the management skill or business acumen so suddenly without a chance for skills transfer. I am not saying we blacks are not capable but that there needed to be time to build-up on skills, to build-up on the farming culture of living out in the rustic country away from city lights – the culture of making farming a business.

  10. Irikidzayi November 3, 2013 at 4:15 am #

    Is there a law that governs Community Share Schemes in terms of who handles the funds and what the funds may be used for? Are there any limits placed on how much money is used for administrative functions and how much must be used for the development, which is the real purpose of these schemes. I think if we fail to establish the rules at the start in a few years time we may be looking at lost opportunities after funds have been misplaced or used in the wrong areas. Some management committees have luxurious tastes and it may not be surprising to see some buy top of the range vehicles from these community share schemes as part of their perks for the job. Akuruma nzeve ndewako, haikona kuzoti Irikidzayi haana kutaura pachine nguva!

  11. UNDEREMPLOYED November 3, 2013 at 11:18 am #

    What Zimbabwe needs to realise…if you want cheap imports in the forms of low cost commuter transport or delicious edibles in your local supermarket…you need the foreigners (with their connections) to do the importing.

    Or pay the highest price to the seller in his home market…where you have zero influence and even less cultural savvy.

    Foreign sellers in Zim are MIDDLEMEN….they are BRIDGES.

    And how many Mbuyas (other than the wives of politicians trying to monopolise the entire economy) can afford a return ticket to Guangzhou??

    If you dont want imports.

    Make it yourself.

    And most important FACILITATE THIS.

    YET another failed policy caused by village thinking.

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