According to the Indigenisation and Economic Empowerment Act, locals should have a controlling shareholding in all foreign-owned companies operating in Zimbabwe.
Government’s move on the manufacturing sector comes after it had agreed with the mining companies on how locals will acquire a minimum of 51% shareholding before the September 30 deadline.
Youth Development, Indigenisation and Empowerment minister Saviour Kasukuwere told Standardbusiness on Friday the ministry would leverage on benchmarks set by the mining industry when looking at other sectors of the economy.
He said although the companies in the manufacturing sector had submitted indigenisation proposals, the ministry would look at them on a case by case basis.
He said discussions with companies would be concluded soon to provide the stability needed in the sector. He said Cabinet had accepted the ministry’s recommendations on the manufacturing sector to ensure maximum participation by locals.
Kasukuwere could not be drawn to divulge the finer details although Standardbusiness is reliably informed the government wants the sector to allow locals to take up a controlling shareholding in four years. “In the first year, locals should have 30%. In the second year, they should get an additional 10% and another 5% in the third year, and reach 51% in the fourth year,” a close source said.
The empowerment legislation is designed to bring locals into the mainstream economy. According to a paper from Kasukuwere’s ministry, every indigenisation implementation plan must include at least 5% equity offer to management and Employees Share Ownership Trust.
In the case of mines, 10% equity should be allocated to the Community Share Ownership Trusts. There should also be a fund for youths to embark on income generating projects.
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Kasukuwere is set to meet executives from Tanganda and South African company, Tongaat Hulett, among others. Tanganda is owned by Meikles Limited and has tea estates in the Eastern Highlands.
Tongaat Hulett owns Triangle and has a 50,3% stake in Hippo Valley Estates, representing a combined installed sugar milling capacity of 600 000 tonnes.Kasukuwere said talks with Old Mutual were progressing well. Old Mutual had been given a week to comply with empowerment laws.
Last year, Old Mutual said it would offload 27% to employees, 17% to local pensions and 7% to the National Indigenisation Trust Fund. However, the company seemed to have been reneging on its earlier pledge, forcing Kasukuwere to order Old Mutual to comply with the Act.
