Zhuwao: investor rules unchanged, ignore Chinamasa

via Zhuwao: investor rules unchanged, ignore Chinamasa – NewZimbabwe 25/12/2015

YOUTH and indigenisation minister Patrick Zhuwao says government position on empowerment policy has not changed at all and come 2016 all foreign owned companies must have complied with the law.

Zhuwao cut short his Christmas holiday and met the press to rebuke Patrick Chinamasa for announcing changes to empowerment laws, accusing the finance minister of “treachery”.

He said it was “unfortunate” for Chinamasa to announce the changes in the absence of President Mugabe, suggesting the treasury chief issued a statement on the emotive issue without consulting his boss.

Chinamasa announced Thursday that government had loosened the terms of a controversial law that forces foreign companies to cede a majority stake to local investors.

The finance minister said government was delaying when foreign investors would have to sell off a majority of their holdings.

“All companies that have not yet submitted their indigenisation implementation plans as required by the Act should submit their applications by the new deadline of 31 March 2016,” Chinamasa said in a statement.

The previous deadline was January 2014.

Chinamasa added: “A non-indigenous business may hold the majority shareholding for a period ranging up to five years except for the energy sector, which can go up to 20 years.”

“Existing foreign-owned companies may continue to operate in all sectors of the economy but shall be required to pay an indigenisation compliance levy as a trade-off for non-compliance.”

But Zhuwawo told journalists on Christmas Day that government was not going to allow any company that rejected the indigenisation policy to operate in Zimbabwe.

“Government is not backing down on indigenisation; President Robert Mugabe has pronounced himself on that.

“The timing of that statement is very unfortunate because it was timed specifically when the President was out of the country, when the President has gone on leave,” he said.

“And that to me appears to be very treacherous because we are all supposed to follow the leader of the country because he is the one who has the mandate and for one to then issue a statement around policy issues without having cleared them with the President does not make sense.”

Zhuwao said it was necessary for cabinet ministers to first consult among themselves so that they understand what they announce publicly.

“So, as for now I am appealing to the business community to comply with the empowerment policy and engage with their line ministry,” he added.

In his statement, Chinamasa said existing foreign owned companies may continue to operate in all sectors of the economy but shall be required to pay an indigenisation compliance levy as a trade-off to non-compliance.

He also said that the amended guidelines were aimed at creating a clear and robust legislation and regulatory frame work.

The Indigenisation and Economic Empowerment Act was passed in 2008 under the controversial black empowerment exercise, but implementation has been chaotic, with potential foreign investors warning the law was prohibitive.

Anxious to attract investors, Chinamasa has for a long time been seen as pushing for changes to Zimbabwe’s rigid empowerment laws. He has, however, often been attacked by cabinet colleagues, among them Zhuwao and war veterans minister Christopher Mutsvangwa.

Zhuwao is President Mugabe’s nephew. He often speaks his mind.

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