Mines will feel the pain of the indigenisation policy more than any other sector.
The government has retreated from its bellicose indigenisation stance and taken a conciliatory approach as it seeks foreign capital to revive faltering industries and stimulate a fragile economy.
A Confederation of Zimbabwe Industries economist said the government had softened its stance after engaging with industry representatives, who expressed concern about the difficulty in courting foreign investment owing to indigenisation concerns.
"There have been a number of meetings with Indigenisation [and Economic Empowerment] Minister Francis Nhema. We had discussions and proposals were made and he promised feedback," said the economist, who asked not to be named because he is not authorised to speak to the media.
"[Nhema] needed to discuss it with the Cabinet before coming with a position but our understanding is that there is clarity on the new approach based on pronouncements by [Finance Minister Patrick] Chinamasa."
In the December budget statement, Chinamasa said that Zimbabwe was desperate for foreign direct investment, which he said required "policy certainty and consistency" on several issues, among them indigenisation.
He said Zimbabwe faced perception challenges related to indigenisation. These had not helped the country's bid to mobilise offshore money to bail out struggling industries.
New rules for indigenisation of economic sectors
Chinamasa said there were new rules for indigenisation of all economic sectors, except mining. These rules no longer compelled all foreign-owned firms to indigenise within prescribed time frames.
He added that only resource-based companies such as mines would be compelled to comply with a 49% shareholding for minorities, with 51% held by indigenous entities whose contribution would be the natural resources.
"With respect to the other sectors of the economy, the 51%-49% share structure still applies. However, what needs to be clarified in this connection is that the 51% stake for Zimbabweans is not available for free where the enterprise does not benefit from a natural resource or raw material derived from Zimbabwe," said Chinamasa.
"In the same vein, where the enterprise does not benefit from a natural resource or raw material derived from Zimbabwe, the business partners in the investment are free to make their own decisions on how and when, within the gazetted framework, the 51% contribution is to be financed or achieved," he said.
This is in sharp contrast to the previous stance under which the government had said all sectors of the economy should have complied with the indigenisation law by March 2015.
A document circulated to companies by the ministry of indigenisation and economic empowerment before the elections last year had said foreign proprietors in the manufacturing, tourism, mining, finance, transport, communication, construction and energy sectors had until January 1 to submit themselves for assessment of compliance with the controversial law.
Nhema could not be contacted for comment, but an official said his appointment had brought "new thinking and … a new paradigm".
Before Chinamasa's statement, several transactions known to the Mail & Guardian, and that appear to have disregarded initial indigenisation thresholds, had already been concluded.
These include the selling of a 63.25% government stake in Zimbabwe Stock Exchange (ZSE)-listed Astra Holdings to Japanese firm Hemistar Investments and the sale of the government's 67% stake in ZSE-listed food manufacturing firm Cairns Foods.
Several other transactions that did not comply with the indigenisation law have also been approved.
These include Mauritian-headquartered AfrAsia taking a controlling stake of 65.38% in AfrAsia Kingdom Holdings after its indigenous partner, Nigel Chanakira, agreed to sell his 30% in September because he did not have cash to capitalise the financial institution.
ZSE-listed seed manufacturer Seed Co is close to sealing a deal for the disposal of its cotton planting seed unit, Quton, to Indian firm Mahyco.
Courting a British investor
The Cotton Company of Zimbabwe, which was renamed AICO after a restructuring in December, is courting a British investor to take up 49% of the business.
The company already has foreign or nonresident shareholders on its books holding significant scrip. Chinamasa said foreign direct investment "is most welcome, and vigorously promoted".
John Robertson, an independent economic consultant, said: "There's recognition that this indigenisation model does not work [but] while there is now a more gentle approach, this doesn't alter the fact that 51% is still to be sold to indigenous people. I still feel there is no justification for a law that forces people to sell their businesses and lose control."
He said the softening approach "proves the stupidity of the indigenisation approach".
Unlike in the past when the National Indigenisation and Economic Empowerment Board could chose an indigenisation partner for a foreign shareholder – a situation Robertson said was "a licence to conduct corrupt transactions" – Chinamasa said investors now have the "privilege of choosing their Zimbabwean partner".
"Only where this arrangement has failed would the government assist," he said.