Companies to procure 50 percent of goods locally | The Herald

via Companies to procure 50 percent of goods locally | The Herald February 7, 2014

ALL companies operating in the country will have to buy 50 percent of their goods and services from indigenous suppliers if ongoing amendments to the Indigenisation and Economic Empowerment Regulations are approved. Section 12 of Statutory Instrument 21-2010, as amended in March, required that all public institutions procure at least 50 percent of their goods and services from indigenous suppliers.

But appearing before the Parliamentary Thematic Committee on Indigenisation and Empowerment yesterday, officials from the National Indigenisation and Economic Empowerment Board said they were now targeting the private sector as well.

Zanu-PF Senator Cleveria Chizema chairs the committee.
“We are currently working on amending Indigenisation and Empowerment regulations so that the requirement that companies procure at least 50 percent of their goods and services from indigenous companies spreads or covers private companies as well,” said Nieeb chief executive officer Mr Wilson Gwatiringa.

“Currently, the regulations talk about those companies which procure their goods and services in terms of the State Procurement Act which then means the public institutions.

“But what we have been doing over the years is to engage all the companies that we deal with as we assess indigenisation implementation plans to have them procure at least 50 percent of their goods and services from locals so that we get business for indigenous companies.

“It is pleasing to note that a lot of the big companies, particularly in the mining sector, are actually doing exactly what we asked them to do.
“They are procuring locally as much as possible except obviously for those specialised services which maybe are not available in the country.”

Mr Gwatiringa said his board was engaging the State Procurement Board to ensure there was bias towards buying local goods and services.
In an interview after the meeting, Mr Gwatiringa said the 50 percent procurement threshold was sustainable despite statistics from the Confederation of Zimbabwe Industries showing that industrial capacity utilisation was below 40 percent.

“If a company invites suppliers, those with capacity will be able to supply,” he said. “We are regulators who want to see local companies being empowered and we believe it is sustainable.

“The State Procurement Board will be very much involved in ensuring this is adhered to.”
Mr Gwatiringa said about 1 470 indigenisation plans had been processed, with the mining and manufacturing sectors leading with 464 and 401 respectively.

On financial institutions, Mr Gwatiringa said, Government did not intend to “indigenise depositors’ money”, adding that negotiations with the financial institutions on indigenisation mechanisms were still underway.

He said a taskforce had been set up to inspect all retail shops operating in the country to establish if all of them complied with the Indigenisation and Economic Empowerment Act on reserved sectors of the economy.

Mr Gwatiringa said they received about 1 300 indigenisation compliance certification applications, with about 600 others having been issued.
The applications are in compliance with a May 17, 2013 Government Gazette regulation making it mandatory for all local and foreign firms in reserved sectors to apply for indigenisation compliance certificates by January 1, 2014.

He said out of 61 registered community share ownership trusts, 16 were operational across the country.
He said companies in community share ownership trusts pledged about US$116,4 million, but only US$30 million had been disbursed.



  • comment-avatar

    Why not just stop using money, because the effect will be the same. Might as well just go back to trading animal skins and trinkets instead. Oh sorry, we’re already doing that.

    The country imports something like 70% of it’s consumables. How are businesses to operate if the product they sell is not made locally? What about gasoline and maize meal? Get ready for E50 ethanol blending.

    Does this government have the money to monitor the activities of every business in the country, to make sure that it’s observing the law? Just enforcing it thoroughly will cost a fortune. Where is the money to come from?

    Oh, I forgot, ZANU-PF will “unlock,” the money currently invested in companies; meaning that they will use the law to suck the money and the life out of the few remaining legitimate businesses functioning in the country. Who needs cars, computers, telephones or jobs? Let’s just trot right back to the stone age.

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    The man is dreaming. He is obviously living in the 80’s when there were suppliers. What will they get from indigenous suppliers? They are not there. This is getting madder and madder when people talk such nonsense.

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    John Thomas 10 years ago

    Lets get right to the heart of the matter. These people have spent a lifetime whining about racism and yet they are now and have always been the biggest racists. Their leader is openly racist. The idea seems to be that while it is wrong for a white to be a racist it is quite ok for a black.

    As to the economics of this article the commentor DL seems to have nailed it. Indigenous business persons do not produce much of any use in the modern context. Machinery, spare parts, consumer goods, tampons, chemicals, in fact almost nothing that makes a modern life possible. I wonder what type of car this idiot gentleman drives and what fuel it uses. Does he practice this 50% malarkey in his own life?

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    Who cares. Pasi zanupf. Go hang gay gangsta mugarbage

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    Mutorwa 10 years ago

    EASY. The so called local companies are owned by the executives in parastatals and govt. They simply order from the companies they own, which then import the suppliers from foreign lands. It’s already happening right now.

    Look at ZESA. They bought cfl light bulbs from a South Africa company, for USD16million. The bulbs were installed in high density homes to “save energy” and with a life cycle of 8 – 15years. 12months down the line, none of the bulbs is still working. But USD16million is gone. It’s because they bought cheaply priced low quality from China through their shelf companies and had them branded appropriately. When the money was gone, they said the remaining consumers had to do the replacement at their own cost. CORRUPTION IN ZIMBABWE! THE CAPITAL OF CORRUPTION IS HERE!

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    Mutorwa 10 years ago

    The South African company imported the cheap quality bulbs from China at a huge mark up to ZESA. Ha ha ha ha! Now ZESA has applied to ZERA for a 16% increase in electricity tariffs to recover the losses. They recon we cannot allow ZESA to fail.

    But when they get the money, they will use it to corruptly award tenders to themselves by purchasing substandard parts which work only for a limited time. But the cash is gone into their bank accounts overseas.

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    gorongoza 10 years ago

    Procure from where when you have destroyed the manufacturing and engineering sector. You mean buy from those who will have imported from South Africa? From maface enyu akana zvicompany zvenyu?