GOVT IN MAJOR CLIMB-DOWN – The Sunday Mail

via GOVT IN MAJOR CLIMB-DOWN – The Sunday Mail by Sunday Mail Reporter | Sunday, May 25, 2014

-Indigenisation Act to be amended

-Major victory for Gono, policy moderates

-Investors will be allowed to recover costs

-Production Sharing Model proposed

In a major climb-down, the Government is in the process of reviewing the indigenisation and empowerment policy to facilitate sector-specific implementation. The developments will be viewed as an apparent victory for policy moderates like Dr Gideon Gono who was a vocal dissenter during his time at the Reserve Bank against indiscriminate implementation of the policy in the banking sector.

Ultimately, the review will allow investors to recover initial capital investment, receive an appropriate return on investment and recoup operational costs.

Information, Media and Broadcasting Services Minister Professor Jonathan Moyo told The Sunday Mail in an interview that the Production Sharing Model (PSM) and the Joint Empowerment Investment Model (JEIM) have been identified as the foremost vehicles through which the indigenisation policy will now be implemented.

PSM is a broad cover for an assortment of production sharing agreements signed between governments and extraction companies concerning how much of a resource extracted from the country each will receive.

The agreements are popular in the oil-rich Middle East.
Following this model, Zimbabweans would retain 100 percent ownership of mineral resources and agricultural land.

Investors will be allowed to recover their initial capital investment, an appropriate return on investment and operational costs before the sharing of production outputs or profits.

Under the JEIM, outside mining, agriculture and particular tourism investments, locals will be encouraged to enter joint ventures as a way of generating capital to build wholly Zimbabwean-owned enterprises.

The proposed amendments to the Indigenisation and Economic Empowerment Act are a significant departure from the previous Government position which insisted on a blanket approach in which foreign companies would have controlling stakes to indigenous Zimbabweans, regardless of sector.

Regarding the new approach, Prof Moyo said: “There’s been quite some debate in Government about this important implementation issue since the adoption of Zim Asset and that debate is continuing as it should.

“There is a growing if not a decided consensus that the model with the best possibility or chance of meeting the ideological, legal and policy necessities of indigenisation and empowerment are the Production Sharing Model (PSM) and the Joint Empowerment Investment Model (JEIM).

Asked whether the new model did not amount to abandoning the initial policy, he said: “Not at all. I don’t know or understand where that suggestion is coming from. It would be sheer folly for anybody to imagine that we would abandon or ditch a policy or programme that was overwhelmingly endorsed by the electorate in unprecedented numbers as recently as 31 July 2013.

“We are reviewing and tightening the indigenisation and empowerment policy by being pragmatic without being dogmatic about it. In any event, the record should show that we did acknowledge in our election manifesto — you can find that on Page 35 — that, while the law is clear that at least 51 percent of the shares or ownership of every public company and any other business shall be owned by indigenous Zimbabweans, there has been some confusion and misunderstanding over the modalities for achieving this threshold.

“Consequently, we pointed out that, going forward there is a need to review, tighten and strengthen both the law and policy to, among other things, clarify the fact that the indigenous Zimbabweans cannot be expected or required to buy back their God-given natural or economic resources.

“This is why we have been having this review and tightening process under Zim Asset.”
In 2008, Government introduced the Indigenisation and Empowerment Act, which requires all foreign-owned businesses operating in the country to cede 51 percent shareholding to Zimbabweans.

The requirement has, however, remained at the centre of debate with moderates advocating flexibility.
Former Reserve Bank of Zimbabwe governor Dr Gideon Gono was among those who advised the authorities to exempt the financial services sector.

There has been growing speculation that Government would move to amend the policy after President Robert Mugabe said the 51 percent model would only work in the mining sector, remarks that were read as suggesting a softening of policy in non-resource sectors of the economy.

 

COMMENTS

WORDPRESS: 11
  • comment-avatar
    Heighho 7 years ago

    NOT ACCEPTABLE. Full freehold title for all land including agricultural land must be available to all investors regardless of race. Land is an immovable local asset which generates revenue through taxes and stamp duty as well production and employment and attendant downstream revenues and benefits. Freehold title underpins our mortgage credit system. Unlike motor cars on which we spend millions of USD. Excon must stop interfering in the property market and govt must legislate title to communal land to be sold (under a carefully monitored scheme in our very dishonest country). REPEAL indig legislation, ExCon legislation and make necessary corrections to Constitution to reverse land grab. Then see investment.

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      roving ambassador. 7 years ago

      Agree. will not expect a 90year old to implement drastic reforms like this.
      Zanu must go.

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    John Thomas 7 years ago

    This is a non starter. If I start a business it is mine. Anything else is theft and I will go elsewhere. ZANU you are lost. Not everybody is as stupid as you.

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    This “reversal” will be reversed.

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    No one will ever believe anything zanupf says.

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    JOHNSON 7 years ago

    Moyo, “We are reviewing and tightening the indigenisation and empowerment policy by being pragmatic without being dogmatic about it.”
    This is an empty statement fro the flip flopping minister. He must just admit that environmental imperatives in the macro environment require this volte-face. He must admit that Gono is a brilliant tactician and visionary. Moyo is high jacking Mr Gono’s idea. Gono is really a natural leader…more is a rubble rouser and even the President knows. Moyo is not an asset i peace time but a vitriolic war monger who suddenly cools down like a madman with intermittent mental challenges. Unfortunately his hardline stances on a number of fronts have cost the nation in many ways. Why does he behave like a hermaphrodite….in water ant out of it. He must choose his side and stay put! Lets hope these signs are positive signals for investments to start coming in. Thumps up for Mzembi, Gono, and Nhema and a blessed other few not forgetting our President. Lets empower the nation and ignore the self- serving power gymnastics of the likes of Mr Jonho Moyo. Fortunately he is the devil we know! Sanity WILL DO FOR NOW AND LET OUR KIDS KNOW PEACE AND NORMALCY!

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    This is absolute rubbish , from a rubbish regime which has failed dismally. This regime is just corrupt to the teeth. They have failed Zimbabwe at the expense of their personal gain.

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    bevin 7 years ago

    Point of correction. Cde Jonathan Moyo as the Minister of Information, Media and Broadcasting Services is just speaking on behalf of the government like what our Vice – President did at the burial of our son of soil, Bregadier – General John Zingoni at our National Heroes Acre when she said, “Government continues to revisit some of its policies, revise its mode of doing work.”
    Thus Minister Moyo is not speaking his mind but of the team called called Government.

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    Straight Shooter 7 years ago

    “Government in major climb down…”

    You wish!!

    Never in Gukurahundiland, never!!

  • comment-avatar
    Petal 7 years ago

    to cut a long story short there has never ever been transparancy these bufoons must go including Mr. Fixit

  • comment-avatar
    munzwa 7 years ago

    just covering the wolf in the sheep skin…we can see through it all!!