Zimbabwe government has issued a warning to all foreigners operating businesses in sectors reserved for locals that they now risky prosecution if they do not give up by January, a report by State media reveals.
Youth, Indigenisation and Economic Empowerment secretary Mr George Magosvongwe gives oral evidence in Parliament yesterday flanked by director of Indigenisation Mr Godfrey Sigobodhla
All foreigners operating retail and wholesale businesses, barbershops, hairdressings, beauty salons, bakeries, employment agencies and grain milling which are classified as reserved sectors of the economy risk being arrested next month if they continue doing business.
The other reserved sectors of the economy according to the Indigenisation and Economic Empowerment Act are agriculture (primary production of food and cash crops), transportation, estate agencies, tobacco grading and packaging, tobacco processing, advertising agencies, milk processing and provision of local arts and crafts, marketing and distribution.
Secretary for Youth, Indigenisation and Economic Empowerment Mr George Magosvongwe told legislators yesterday that the foreigners who defied the law would be prosecuted.
He made the remarks when he, together with officials from his ministry, appeared before a joint meeting of the Parliamentary Portfolio Committee on Youth, Indigenisation and Economic Empowerment and the Thematic Committee on Indigenisation and Empowerment co-chaired by Gokwe-Nembudziya MP Cde Justice Mayor Wadyajena and Harare Metropolitan Senator Cde Cleveria Chizema.
“I confirm that some non-indigenous entities are still operating in the reserved sectors and there is a deadline for January 1 for them to comply with the requirement to relinguish their holdings in that sector,” said Mr Magosvongwe while responding to a question from Cde Wadyajena on what Government was doing to ensure compliance in the sectors.
“You will realise Mr Chairman that 1 January is a month to come and we are putting in place measures for enforcement in the event that they do not comply.”
Mr Magosvongwe said Government was in the process of identifying indigenous Zimbabweans who would take over ownership of those businesses in the particular sectors.
This, he said, was meant to avoid creating shortages when the foreigners leave.
“There is need to ensure that we don’t create shortages in the economy, but certainly the ministry is going to enforce the reserved sectors rule,” he said.
“And we will bring in the enforcement agencies from right across the Government departments and the local authorities to ensure that enforcement happens.”
The January 1, 2014 ultimatum was gazetted in May, making it mandatory for all locally and foreign-owned firms in reserved sectors to apply for indigenisation compliance certificates.
Only locals will be given those certificates.
Nigerians and the Chinese who flooded the country in recent years are set to be the biggest casualties as they set up shops dealing in various wares in almost every town.
The regulations stated that any person including locals who operate a business in the reserved sectors without an indigenisation compliance certificate with effect from January 1, 2014 shall be guilty of an offence and liable to a fine not exceeding level four or to imprisonment for a period not exceeding three months or to both such fine and such imprisonment.
The regulations further state that the minister may direct any licensing authority to revoke, suspend or cancel the operating licence of a business operating in contravention of the regulations.
Anyone person, according to the regulations, who interferes with the exercise would be guilty of an offence and liable to a fine, imprisonment for a period not exceeding two years or both fine and imprisonment.
But the National Indigenisation and Economic Empowerment Board has already indicated that foreign-owned restaurants that do not serve local food would continue to operate, while transport companies whose headquarters are outside the country would also be considered for exemption.
Mkoba MP Mr Amos Chibaya asked what Government position was regarding the indigenisation of banks in the wake of divergent views on the issue.
Mr Magosvongwe said foreign banks operating in the country were holding money from Zimbabweans, hence there was need to guarantee citizens’ participation in the sector.
“Our position as a ministry is that the law requires the banks to indigenise,” he said. “The implementation matrix for the indigenisation of the banks is something that can then be worked upon.”
Mr Magosvongwe said banks were forthcoming with proposals that were positive, adding that they were working with the Reserve Bank of Zimbabwe with the intention to achieving the agenda of indigenising the sector according to the law.
Chiefs raised concern with the implementation of Community Share Ownership Schemes, saying they were not seeing the proceeds despite the fact that they sat in committees that were mandated to administer the funds.
Chief Musarurwa of Mashonaland East said they were made to sign symbolic cheques for Mashonaland East Community Share Ownership, but up to now no money had been disbursed despite claims on the ground that the money was disbursed.
Mr Magosvongwe acknowledged that some of the Share Ownership Schemes were yet to benefit since the companies had not yet disbursed the money.