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Mugabe in major climbdown

The government gazetted new measures watering down the controversial Indigenisation law on December 24, a development that exposes lack of policy coordination in President Robert Mugabe’s government.

By Everson Mushava

Indigenisation minister Patrick Zhuwao on Christmas day accused Finance minister Patrick Chinamasa of treachery after the Treasury chief announced the changes in Mugabe’s absence.

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Zhuwao was supported by Higher and Tertiary Education minister Jonathan Moyo in an argument that captivated Zimbabweans on social media.

Zhuwao is Mugabe’s nephew and he had suggested that Chinamasa was trying to sabotage his uncle who is holidaying in the Far East after the minister announced the changes, a few days after the 91-year-old leader had vowed to tighten the noose on companies that were failing to comply with the law.

However, the gazetting of the new indigenisation regulations turned the tables on Zhuwao as it shows that Mugabe was not only aware of the move, but also approved it.

According to the Government Gazette published on December 24, Framework — Procedures and Guidelines for Implementing the Indigenisation and Economic Empowerment Act (Chapter 14:33) — a cocktail of new measures have been introduced that will include empowerment credits and shareholding rebates to investors, depending on the type of business and level of compliance.

Compliance, according to the new regulations introduced to improve the country’s ease of doing business, indigenisation is no longer just going to be equity-based, but will also include other factors such as supporting the country’s economic objectives and corporate social responsibility.

Companies will no longer be forced out or nationalised for failing to comply with the indigenisation law, but will be charged a levy for non-compliance.

“Existing foreign-owned companies may continue to operate in all the sectors of the economy, but shall be required to pay an indigenisation compliance levy as trade-off for non-compliance,” section 30 of the gazette reads.

“An indigenisation compliance levy shall be imposed on a sliding scale, rewarding businesses which are compliant whilst penalising non-compliant businesses,” section 31 reads.

Zhuwao has been attacking Chinamasa for trying to dilute the country’s indigenisation laws, going to the extent of accusing him of treachery.

He was adamant the country should maintain the hard-line stance in the country’s controversial indigenisation laws, while Chinamasa was calling for a review of the policy to make it investor-friendly.

The two were meant to address a joint press conference on December 24, but Chinamasa and Reserve Bank governor John Mangudya reportedly stormed out of a pre-conference briefing after sharp differences emerged with Zhuwao over the proposed changes.

It has now emerged that while Zhuwao was attacking Chinamasa, the Finance minister had already pushed his proposals through the normal channels until they were signed into law through the extraordinary Government Gazette.

It would appear Zhuwao was not aware of this development.

Zhuwao was not reachable for a comment yesterday to clarify his misgivings with Chinamasa’s proposals and the public spat given that the issue was already water under the bridge.

According to the gazette, government will now pursue indigenisation through State enterprises and structures and not individuals, a system that had created fertile ground for corruption.

The new regulations also give companies a grace period of up to five years, with a further allowance to apply for more time of up to 20 years after the expiry of the five years.

“The 51% equity held by designated entities in the resource-based sectors of the economy may be diluted to the extent of injection of additional capital by foreign shareholders on a pro rata basis subject to condition that the designated entities shall be entitled to buy new shares in order to restore their shareholding to 51% within a period ranging up to five years, which period may be extended upon application in terms of section 3(a) of the IEE general regulations,” section 21 of the gazette read.

Section 19 reads: “A non-indigenous business may hold the majority shareholding for a period ranging up to five years (except for the energy sector which can go up to 20 years), which period may be extended upon application in terms of section 3 (a) of the IEE Regulations.”

Non-resource sectors include manufacturing, financial services, tourism, construction and energy.

All investment will now be done through Zimbabwe Investment Authority (ZIA) to facilitate the ease of doing business by establishing a one-stop investment centre.

“All companies that have not yet submitted their indigenisation implementation plans as required by the Act should submit their application through ZIA by the new deadline of March 31 2016.”

ZIA will process the applications with consultations with line ministries.

Companies have also been urged to buy locally-produced goods.

However, the new law maintained some of Zhuwao’s hard-line proposals such as imposing a heavy indigenisation levy on companies.

12 Responses to Mugabe in major climbdown

  1. simba January 3, 2016 at 6:22 am #

    forgive zhuwawo hes a spoiled brat who grew up in abundance as a result he is out of touch with reality in that he does not understand how much zimbabweans are suffering as a result of poorly thought laws like his indegenisation law he is busy agitating for.he does not care how it is affecting the ordinary zimbabwean as long as he anc his family are corruptly feeding on this nation.shame on this poor minded chap.

  2. Stanley Makonese January 3, 2016 at 11:36 am #

    It is shameful to demand a portion of a company which is not yours. That behaviour reflects an inferiority complex. As citizens we have the capacity to form our own companies like Econet. Foreign companies are already giving the country more than enough through company tax, income tax, VAT, etc. Our obligation is to use this money from tax properly. Zvinonyadzisa kuti Barclays yava yangu! On what grounds? If I want to go into banking, then I SHOULD FORM MY OWN BANK, like what NYEMBA did. We will never be rich in our own country if we wait for somebody to start their company, then we jump in and demand ownership of their company. Why cant Zimbabweans, mostly learned university graduates for that matter, understand this?

    How would you feel, if you went to invest in Mozambique, and Mozambiquans demand 51% of your investment. We are simply legitimizing THEFT.

  3. Sagitarr January 3, 2016 at 12:27 pm #

    Spot on Stanley. Personally I wonder at those people who support ZPF and its policies. I was brought up in a poor but religious environment where hardwork and honesty were cherished values. I find it completely reprehensible to support stealing and murder in any of their numerous forms. It is for these two fundamental beliefs that I find no inspiration in this government and all it stands for. When “leadership” now stands legimitizing theft, dishonesty and murder, I say no.

  4. John Bere January 3, 2016 at 12:34 pm #

    We thought Zhuwao’s stance on indigenisation
    was supported by Mugabe, his uncle. Surely Chinamasa could not have been so naive to publish in the Govt Gazette these amendments to the Act gwithout the President’s approval. Now in advancing G40’s interests Zhuwao and Jonso have egg on their faces. We will see if they will turn the tables this time around.

  5. mubwidi January 3, 2016 at 3:30 pm #

    zhuwao ukufunga kuti uri pamsoro pemitemo nekuti uri muzukuru wabob, nguva irikuswedera……..

  6. Tiger Shona January 3, 2016 at 4:04 pm #

    It is an improvement but still not the answer. This is one of the issues that will eventually destroy Zanu PF.

  7. Timothy Thorton January 3, 2016 at 4:16 pm #

    Zhuwao does not seem to understand the difference between his relationships with the President of Zimbabwe and is totally confusing the two. Egg on his face. Why talk on the President’s behalf when George is paid to do exactly that. And even then there was an actiing President who could have stopped the gazetting.

  8. Muzezuru January 3, 2016 at 4:30 pm #

    Zvikuda a cup of coffee.😎

  9. vivian v siziba January 3, 2016 at 6:35 pm #

    Agreed Stanley Makonese,our people should had paraded their administrative and entrepreneurial skills and saved banks like Interfin, Kingdom, Trust goodness the list is endless from collapsing.Why targeting banks like Stanchart,Barclays,Stanbic etc which have a culture of good governance for forced share acquisition? This is theft and extortion thinly disguised as black economic empowerment.The beneficiaries from this piece of legislation are big chefs administering this law,big losers are the employees of the bank and state Treasury.

  10. machakachaka January 4, 2016 at 8:09 am #

    I have always said Patrick Zhuwawo is misreading the President. Zhuwawo wants indeginisation with no FDI, whilst Mugabe wants indeginisation together with FDI. Zhuwawo is all noise and no brains but fortunately, he is not the president.

  11. River January 4, 2016 at 3:40 pm #

    So the 91 year old aka “Zimbabwe is Mine” has got all his relatives on the bandwagon who make noise all the time from his young wife to his nephew amongst others

  12. sofiyathomas1121 January 6, 2016 at 10:09 pm #

    Start working at home with Google! It’s by-far the best job I’ve had. Last Wednesday I got a brand new BMW since getting a check for $6474 this – 4 weeks past. I began this 8-months ago and immediately was bringing home at least $77 per hour. I work through this link, go to tech tab for work detail.
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