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.