Amend indigenisation law: EU, US

via Amend indigenisation law: EU, US – DailyNews Live by Fungi Kwaramba 30 MAY 2014

The European Union (EU) and the United States of America have said President Robert Mugabe’s government’s policy relaxation on the controversial indigenisation regulations, should be enacted into law.

Zimbabwe on Sunday announced a raft of changes to the contentious empowerment policy which compels foreigners to cede 51 percent shareholding to indigenous Zimbabweans.

In a major climb-down, government is revising the indigenisation law to allow for sector-specific implementation.

The policy somersault will allow investors to realise their initial capital investment, get appropriate return on investment and recover operational costs.

The new arrangement will see the empowerment policy being implemented through two models; the Production Sharing Model and a Joint Empowerment Investment Model.

In separate interviews, the EU and US ambassadors said there was now need for government to put words into action.

Ado Dell’Ariccia, the EU ambassador to Zimbabwe, said the EU was looking forward to the gazetting of  the changes.

“We have permanently said government should send reassurances to the international community,” Dell’Ariccia said. “There was lack of clarity in the policy and we can only welcome the government stance especially if it dissipates the fears of the international community. The message is positive but words alone are not sufficient.”

Although relations between Zimbabwe and the West have been thawing over the past few years, the indigenisation policy remains one of the chief impediments to attracting investors from either the EU or US.

Bruce Wharton, the US ambassador to Zimbabwe, said government should strike a balance between protecting national interests and promoting investment and economic growth

“We welcome the apparent willingness to review policy and find the right balance between,” he said. “We look forward to seeing the regulations when they are gazetted.  I remain optimistic about Zimbabwe and believe that transparent, consistent, fiscally responsible policies are the key to rebuilding the nation’s economy.  As I have said many times, Zimbabwe’s economy and its future is in the hands of Zimbabweans.”

Experts claim that the country has missed out on over $7 billion worth of lines of credit from international banks due to uncertainty posed by the country’s indigenisation programme, which Zanu PF used as its campaign trump card during last year’s general elections.

Dell’Ariccia said foreign investors, who are required to give impetus to the economy, need something solid in order to bring their money to the landlocked nation.

“Investors need something that is solid, something that is laid in a gazette. Government should find a balance between national interests’ logical capital demands,” said Dell’Ariccia.

Recently, Mugabe ruled out a one-size-fits-all indigenisation approach, saying only companies utilising the country’s natural resources will be required to immediately give up majority stakes to indigenous Zimbabweans.

During the inclusive government era, Mugabe’s cash-strapped government, aggressively pursued the populist policy, refusing to exempt sensitive sectors like banking but the dire economic prospects have necessitated a shift, analysts said.

 

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