Get more Mail & Guardian
Subscribe or Login

Zim Cabinet orders changes in indigenisation law

Zimbabwe’s Cabinet has ordered that a controversial equity law which forces foreign companies to cede a majority shareholding to local investors be amended, a minister said on Thursday.

“Cabinet has said the law should be aligned with the Constitution and we will soon be making the necessary adjustments,” Indigenisation Minister Francis Nhema told AFP.

The controversial 2007 indigenisation law orders that foreign firms hand a 51% shareholding to local partners.

Finance Minister Patrick Chinamasa on Wednesday told Parliament that Cabinet had decided that the law be changed to make it clearer and friendlier to investors.

“We want a win-win situation. We are aware that investors don’t come here for charity. They come to make money,” Chinamasa said. “Where investors come with their money equipment, we have never said we want a share of that money.”

In its original form, the law spooked investors amid a weakening economy and high unemployment levels. The indigenisation law has also been a source of conflict between President Robert Mugabe’s allies, with some maintaining a hardline stance while others opposed the measures.

Information Minister Jonathan Moyo earlier divulged some details of the planned changes to the indigenisation and empowerment policy. One of the aspects of the law is that it will allow foreign investors to recover their initial capital investment, a return on investment and operational costs before sharing profits, said Moyo.

Under the law, foreign owners of mines in Zimbabwe were given an ultimatum to surrender more than 50% of their shares and find local partners or risk nationalisation.

Mugabe said that the law, which followed controversial land reforms launched two-and-half decades ago, was meant to reverse imbalances which resulted from colonialism.

But critics, including opposition leader Morgan Tsvangirai, have been adamant that the law would enrich Mugabe’s allies and scare away foreign investors.

Tsvangirai’s Movement for Democratic Change (MDC) dismissed the planned policy changes as unclear and it doubted the government’s political will to improve the investment climate. “The MDC categorically dismisses the purported policy shift as a case of too little too late,” said Tapiwa Mashakada, the party’s acting secretary general.

“We see this move as mere posturing.”

“All current efforts by the Zanu-PF government to hoodwink investors will come to naught until the government seriously addresses the perceptions and realities around the sovereign risk of the country and the security of investments,” said Mashakada.

A new Constitution came into effect in March last year. – AFP

Subscribe for R500/year

Thanks for enjoying the Mail & Guardian, we’re proud of our 36 year history, throughout which we have delivered to readers the most important, unbiased stories in South Africa. Good journalism costs, though, and right from our very first edition we’ve relied on reader subscriptions to protect our independence.

Digital subscribers get access to all of our award-winning journalism, including premium features, as well as exclusive events, newsletters, webinars and the cryptic crossword. Click here to find out how to join them and get a 57% discount in your first year.

Related stories

WELCOME TO YOUR M&G

If you’re reading this, you clearly have great taste

If you haven’t already, you can subscribe to the Mail & Guardian for less than the cost of a cup of coffee a week, and get more great reads.

Already a subscriber? Sign in here

Advertising

Subscribers only

Mabuza’s Russian jaunts and the slippery consequences of medical tourism

For more than five years the deputy president has remained steadfast in his right to travel abroad to receive medical treatment

Zondo commission: 10 unanswered questions

Zuma went to jail rather than testify. Some who did told blatant lies. Who decided Cabinet appointments and how much money was carried out of Saxonwold?

More top stories

Ugandan teachers turn to coffin-making after schools close

The Covid-19 pandemic resulted in the country’s schools closing and teachers being left without jobs

Mabuza’s Russian jaunts and the slippery consequences of medical tourism

For more than five years the deputy president has remained steadfast in his right to travel abroad to receive medical treatment

A new book asks the timeless question: ‘Can We Be...

Ziyanda Stuurman’s new book critiques the South African police and their role in society

‘These people are barbarians’: Police torture in Southern Africa

In Botswana, South Africa and Zimbabwe torture is used to extract information, elicit confessions, punish or sometimes for sadistic reasons
Advertising

press releases

Loading latest Press Releases…
×