PRESIDENT Robert Mugabe’s plans to amend the controversial National Indigenisation and Economic Empowerment Act could draw a furor of debate in parliament after opposition legislators jeered at proposals he made at the opening of parliament this week.
Opening the Seventh Parliament on Tuesday, Mugabe said his government would among other things table motions that would give indigenisation minister more powers to oversee the empowerment exercise with “renewed vigour”.
The empowerment act was promulgated in April amid outcry from business and civic quarters alleging that its implementation would result in government expropriating foreign owned companies.
“Now that the National Indigenisation and Economic Empowerment Act, which provides for the acquisition of at least 51 percent shares in every public company and any other strategic businesses by indigenous persons is law, implementation of the empowerment policy shall be pursued with renewed vigour on a sector-by-sector basis,” said Mugabe.
“However to facilitate implementation, some amendments of the Act will have to be brought to this Parliament during this session. The amendments will among other things, empower the relevant minister to prescribe what constitutes a strategic company or sector, the timeframe for compliance with the Act, and the approval format for indigenisation arrangements.”
The president’s remarks were responded to with interjections from opposition members of parliament who reminded Mugabe of the ill-planned land reform programme.
“Minda makatadza wani (You failed on the land exercise),” shouted an MDC MP.
Speaking at the just-ended American Business Association of Zimbabwe Just Business forum, LonZim country representative Geoff Goss said his company had no immediate plans for an “exit package” despite imminent plans by government to seize control of foreign-owned companies. Conglomerate Lonhro Plc has a 20% stake in the company with remainder being shared by emerging market funds.
“We don’t have one, it is not our intention to move out. It’s not on top of our agenda right now,” said Goss.
“Indigenisation requires empowerment rather than endowment…experience rather than expedience. As foreign investors, we have the responsibility beyond simply making profits for our stakeholders. We must also respect, include, engage and return to the communities we operate in.”
He said LonZim had plans to raise US$100 million to invest on the local market, hinting a keen interest in tourism and mining. The mining sector is likely to be affected by the exercise.
Earlier this year Chamber of Mines of Zimbabwe, David Murangari warned government against “adverse monetary and economic policies” which inhibit exploration, development and major capital projects. Murangari said there was need to revisit the empowerment Act. The gold mining sector is forecasting a significant drop of about 4,5 metric tonnes compared to 29 metric tonnes at peak in 1999.
“This law, in its present form does not inspire both local and foreign investors to commit their funds in growth projects for the long term,” he said.
“The Chamber of Mines is not against the policy of indigenisation as such, and it would suggest that the objective should be to promote further development of the mining industry by taking into consideration the fact that it is capital intensive and requires long periods of investment before positive returns are experienced.
What the industry encourages is a policy that will grow the “cake” rather than share an existing small one.”
Last month Indigenisation minister Paul Mangwana said hundreds of foreign-owned companies earmarked for the government takeover were being audited before the exercise commences.
Mangwana said British investors held stakes in at least 499 Zimbabwean companies while 353 firms have shareholders from other European countries.
By Bernard Mpofu