via CZI calls for reform of indigenisation policy – NewsDay Zimbabwe July 31, 2015
GWERU — The local business community is willing to work with government to reform the indigenisation policy to create conducive environment for investors to enhance economic development, the Confederation of Zimbabwe Industries (CZI) has said.
BY STEPHEN CHADENGA
CZI president Busisa Moyo said business was prepared to provide government with indigenisation models that are favourable to the private sector.
“As business we understand that the indigenisation policy is here to stay, but it is the form and format of that piece of legislation that we must work on,” Moyo said in his opening remarks at the ongoing CZI annual congress in Gweru.
“We are looking at that piece of legislation to give you indigenisation models.”
The conference opened on Wednesday and ends today.
The law was passed in 2007 and requires that foreign-owned companies worth more than $500 000 sell at least 51% of their shareholding to locals.
Economic experts say since the Act was put in place the country has not only witnessed capital flight and kept investors at bay, but also worsened the ease of doing business.
“We should be cognisant of the fact that we are not the only investment destination available to investors and policy inconsistency is one among many broad challenges of doing business,” Moyo said.
The cost and ease of doing business in the country remains high and Zimbabwe is ranked 171 in the world on a measurement of regulations that enhance business activity or constrain it.
Moyo said the country needed to re-engage with the Paris Club, which is a voluntary, informal group of creditor nations who meet approximately 10 times per year, to provide debt relief to developing countries.
“The first table we should find ourselves at is the International Monetary Fund (IMF), we might not like them (IMF), but the leading indicator is that we will always find ourselves at the back of the queue,” he said.
Zimbabwe has not been attracting a huge chunk of foreign direct investment (FDI) compared to its regional neighbours.
FDI to Zimbabwe was at $545 million last year from $400 million in 2013.
However, the inflows were a drop in the ocean compared to $5,7 billion recorded by South Africa, Mozambique’s $4,9 billion and $2,4 billion that went to Zambia.