The Zimbabwean cabinet has approved the principles of the Economic Empowerment Bill, which seeks to repeal previous legislation that has been condemned as investor unfriendly.
“The principles will repeal the Indigenization and Economic Empowerment Act … and pave way for the enactment of the new Economic Empowerment Act,” Monica Mutsvangwa, the Minister of Information and Publicity said at a post-cabinet media briefing Thursday.
She said the new act will be aligned to the Constitution of Zimbabwe, national development strategies, Vision 2030, the United Nations Sustainable Development Goals and the African Union Agenda 2063.
“The formulation of the draft Bill will be undertaken through a multi-stakeholder consultative process under the Whole-of-Government Approach. The new law will provide for the establishment of the National Economic Empowerment Fund, mainly through Treasury funding. The Act will also establish a Corporate Social Responsibility Framework,” she said.
The current Act, which was gazetted in 2008, has been condemned as not being investor-friendly, especially in the minerals sector, thereby hindering foreign direct investment.
When it was passed, indigenous Zimbabweans were entitled to 51 percent shareholding in most foreign-owned companies, while some sectors were specifically set aside for locals.
However, the law has since been amended to allow greater participation of foreigners in the economy and shareholding now depends on agreed terms, as foreign shareholding can now reach as high as 100 percent.