Buy Zim condemns govt’s move to shut down foreign-owned companies

via Buy Zim condemns govt’s move to shut down foreign-owned companies – NewsDay Zimbabwe March 30, 2016

BUY Zimbabwe has condemned government’s move to shut down all foreign-owned companies that have failed to comply with the indigenisation policy, saying the move would trigger continued economic decline and abject poverty.


In a statement yesterday, Buy Zimbabwe chairperson Oswell Binha said the latest turnaround on indigenisation laws would likely further discourage investment in a country already hard-hit by a debilitating liquidity squeeze, low capacity utilisation of less than 50%, company closures and massive job losses.

“The proposed Cabinet directive to close companies as a punitive measure is tantamount to condemning Zimbabwe into continued economic decline and adjective poverty.

This issue of government trying to decimate the private sector is very unfortunate and uninformed. Threatening to close companies shows a lack of understanding of the economy and forces of economic prosperity.

“The government needs to take stock of the impact of what is being done by the Indigenisation ministry. The consequences of the confusion that has emanated from the numerous pronouncements on indigenisation are already being keenly felt,” Binha said.

Last week, Youth Development, Indigenisation and Economic Empowerment minister Patrick Zhuwao said Cabinet had on March 22 unanimously passed a resolution directing that from April 1 2016, all line ministries proceed to issue orders to the relevant authorities to cancel licences of non-compliant businesses within their respective sectors of the economy.

He said Zimbabwe’s economy is in dire straits and the government has been trying to shore it up by engaging the International Monetary Fund and other multilateral institutions.

Binha said there has also been an effort to attract meaningful foreign direct investment by improving the ease of doing business in the country.

He said industries were currently operating at less than 50% of their capacity and were heavily undercapitalised. However, he said there were few resilient companies which were doing their best to stay afloat under the harsh operating environment.

“In the midst of this economic malaise, Zimbabwe’s contentious indigenisation programme remains a millstone around the neck of the economy amid lack of a settled and progressive policy informed by a realistic economic agenda beyond the current legal framework.

“While the Act was ostensibly promulgated to empower Zimbabweans economically be ensuring at least 51% of shares of every public company and any other business shall be owned by indigenous people, the process has since degenerated into a farce amid indications of inconsistency and lack of genuine dialogue and engagement,” he said.