French investors committed to Zimbabwe

via French investors committed to Zimbabwe — Envoy – DailyNews Live John Kachembere, BUSINESS EDITOR • 10 February 2016

HARARE – French Ambassador to Zimbabwe Laurent Delahousse says French investors are willing to increase the investments in the country following the introduction of new amendments to the Indigenisation Act.

The envoy told the businessdaily at the unveiling of Total Zimbabwe’s state-of-the-art service station in Westgate recently that French companies were committed to Zimbabwe’s economic development.

Some of French companies that have footprints in Zimbabwe include Lafarge, Total, Vinci, SamrecImerys, Bureau Veritas, SeedCo and Limagrain, Motech and Motul, AGS Frasers, Gyproc and Saint Gobain, Anchor Yeast and Lesaffre, Meteo France International and Sanofi.

“We are happy with the new amendments and clarifications that have been brought by the Finance minister Patrick Chinamasa and Youth and Indigenisation minister Patrick Zhuwao,” he said, adding that he hopes the new amendments would be implemented soon in a transparent manner.

“I hope the situation is going to improve soon and there are good opportunities for business and job creation, trade, investment and for commerce to improve our economic relations,” he said.

Under Zimbabwean law, foreign and white-owned companies with assets of more than $500 000 must cede or sell a 51 percent stake to black nationals or the country’s National Economic Empowerment Board.

However, the law has been blamed for poor foreign direct investment inflows into the country due to its rigidity forcing the government to gazette new Indigenisation regulations aimed at attracting new investors into the investor-starved southern African nation.

Under the new regulations gazetted last month foreign companies operating in the manufacturing sector would be given leeway to phase the implementation of indigenisation such that in the first year they cede a lesser share at 26 percent and 36 percent in the second year, 46 percent in the third and 51 percent achievable in the fourth year.

In the reserved sectors, such as mining, non-indigenous businesses will be required to pay the full amount of the Empowerment Levy — which will be charged at 10 percent of the business’ gross turnover — as part of measures designed to ensure compliance with the indigenisation legislation.

The government has also backed down from its earlier position, which rejected empowerment credits and corporate social responsibility as part of the measures through which to achieve black economic empowerment.

But Delahousse said pegging the empowerment levy at 10 percent of companies’ gross profit “was not only unreasonable” but would also deter potential investors from the country.

The French envoy, who has brought various business delegations from France in the past few years to explore investment opportunities in the country, said the country must cast its net wider to attract more foreign direct investment.

“Zimbabwe has very active friends in the East but that isn’t enough, you need technologies, projects and ideas coming from everywhere,” he said.