via ZANU PF ‘backtracks’ on indigenisation threats | SW Radio Africa by Alex Bell January 2, 2014
ZANU PF has appeared to backtrack on threats against foreign business owners, weeks after warning that punitive action would be taken against those who failed to hand over their businesses to ‘indigenous’ Zimbabweans.
Indigenisation Minister Francis Nhema told the AFP news service that as of News Years day on Wednesday, foreigners would not be issued with trading licenses in the ‘reserved’ sector. He said that current traders would also need to find local partners to buy majority shares in their businesses, and they have up to five years to comply with these rules.
“In some areas, they will be given four years in some areas, five. It all depends on the area and individual circumstances,” he said.
“Wherever there are problems we can always discuss and see how we can help each other. It’s all about creating employment and empowering indigenous Zimbabweans. There is no victimisation,” said Nhema.
This is contrary to the ultimatum voiced by the Secretary for Youth, Indigenisation and Economic Empowerment George Magosvongwe last November, when he told a parliamentary committee meeting that the foreigners who defied the law would be prosecuted.
“I confirm that some non-indigenous entities are still operating in the reserved sectors and there is a deadline (of) January 1 for them to comply with the requirement to relinquish their holdings in that sector…and we are putting in place measures for enforcement in the event that they do not comply,” said Magosvongwe.
Under the country’s Indigenisation and Economic Empowerment Act, reserved sectors include agriculture, transport, retail, barbershops, hairdressing and beauty salons, employment and estate agencies, bakeries, tobacco processing, advertising agencies and even arts and crafts provisions. The law requires business owners to apply for compliance certificates that are only eligible for Zimbabwean nationals.
Traders in these sectors had been left confused and concerned by the threats and ultimatums being voiced by the government, which has been steadily pushing ahead with its controversial indigenisation plans.
Economic analyst Masimba Kuchera told SW Radio Africa that Minister Nhema’s attempts to backtrack on the threats are a sign of a “reality check,” saying it was unrealistic to force a total clampdown on foreign traders.
“I also think that some of the statements from that are being made by politicians are an attempt to live up to the party’s hard line stance. I think that it’s important for there to be a reality check. Had all the foreign owners gone in a flash, there’s not enough capital for indigenous people to start shops and so on. So there would have been a bigger backlash than just allowing the foreign owners to stay,” Kuchera said.
He added: ZANU Pf is still trying to strike a balance between being hard-line and sticking to their economic blueprint, and the reality that such a stance doesn’t work under such economic conditions. It’s a question of them not wanting to be humiliated.”