More Zim companies face indigenisation threat

via More Zim companies face indigenisation threat | SW Radio Africa by Alex Bell

About 100 Zimbabwean companies have been handed a 14 day ultimatum to officially register their compliance with the controversial indigenisation laws, or face serious punitive measures.

In a statement published over the weekend, the National Indigenisation and Economic Empowerment Board (NIEEB), issued the ultimatum giving companies whose indigenisation plans have been approved, two weeks to apply for certification.

The NIEEB also said that companies trading in the reserved sectors of the economy, such as retail, had until January next year to comply with the laws.

This was followed by a warning that failing to do this would result in punitive action, including a fine or even prison time.

“Any person who operates a business in the sectors prescribed under the Third Schedule without an indigenisation compliance certificate from 1st January 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 NIEEB statement read.

The ZANU PF led indigenisation campaign has been characterised by threats against foreign owned firms across different business sectors, leading to serious uncertainty.

This in turn has led to some companies closing their doors, including the shut-down last week of Dalny gold mine near Kadoma. The mines Canadian parent company announced last Friday that 900 workers have been sent home on unpaid leave, blaming the indigenisation scheme, among other issues.

Toronto-listed New Dawn Mining also warned that it was uncertain about the continued viability of its other operations in Zimbabwe, including Old Nic and Turk-Angelus mines in the Matabeleland regions. Camperdown and Golden Quarry mines in the Midlands could also be affected, along with Venice mine near Kadoma.

In a statement last Friday, the company said it was putting Dalny Mine on ‘care and maintenance’, listing a number of problems, including delays in reaching an agreement with the government over its indigenisation compliance plan. The company said uncertainty over the issue was adversely impacting its operations.

“A major underlying factor contributing to the Dalny Mine’s current difficulties has been the more than two year delay in the still incomplete approval process for the Company’s proposed Plan of Indigenisation,” New Dawn said.

It added: “After years of underdevelopment, had an investment program in the Dalny Mine been implemented and completed as originally anticipated, the Dalny Mine would have been positioned to maintain profitable operations in today’s environment of lower gold prices and increasing costs.”

This development means that the 900 mine workers and their families, which is estimated to be almost 4,000 people, have been left with no access to a basic salary. The country is already battling more than 90% unemployment and a looming hunger crisis, and it is feared this will not be the last company to close its doors.

Economist Masimba Kuchera said the economic climate is “very tense,” saying there is a “free for all” underway in terms of the indigenisation scheme.

“The NIEEB is acting independently without any government guidance because there is no cabinet to direct the policy. So there is this vacuum that is adding even more tension to the market,” Kuchera said.

He said the political tensions that have followed the elections and the anti-West rhetoric being voiced by ZANU PF was also adversely affecting the situation.

“The investment market has indicated the uncertainty and this can be seen by the downward spiral of the stock exchange. So really what is needed now is clarity and a clear policy direction to be implemented,” Kuchera said.

COMMENTS

WORDPRESS: 7
  • comment-avatar

    more closures and unemployment

    • comment-avatar

      The miners can go home and reap the land, or work for free for their new Zanu bosses.

    • comment-avatar
      Peter Macklyn 7 years ago

      You get the government you voted for or didn’t vote for. If the people are unhappy with the cheating, they must take to the streets and get rid of this scourge of the earth, mugs, before he completely destroys the country.

  • comment-avatar
    papa zulu 7 years ago

    We expect a better and thoughtful response than this cde. Put yourself in the miners predicament.They have families to feed, clothe and school fees to pay etc.Let us avoid comments that portray our selfishness and narrow mindedness.The closure of any organisation affects all workers irregardless of political affiliation.The policy is good because we natives just like in any other countries need protection but I think there is need to revisit its modus operandi by the incoming cabinet.Being militant won’t solve anything but simply scares away investors.

  • comment-avatar
    Past future 7 years ago

    When things like this happen, we all need to pray to God. God is the answer

  • comment-avatar
    Tjingababili 7 years ago

    LEGALISED THEFT!

  • comment-avatar

    The closure of Dalny Mine should be seen for what it is… a major blow to a struggling economy. In addition to the 900 employees who have lost their jobs, there will be a knock on effect that will impact many others that work for industries that service Dalny and its staff.
    Zimbabwe’s indigenization laws appear to be a threat to our overall economic well being rather than a means of sharing the cake more equally. There is concern that the policy will not be applied intelligently, nor with a view to benefiting the man in the street. (to put it mildly!)