Home » General » ZIMBABWE AMENDS LAW REQUIRING LOCAL MAJORITY OWNERSHIP OF COMPANIES

HARARE -- The Zimbabwe government says it has enacted changes to the once controversial Indigenisation and Economic Empowerment Act, which demands majority local ownership of companies operating int he country, making the requirement applicable only to the platinum and diamond mining sectors.

Finance and Economic Development Minister Patrick Chinamasa announced the intention to make the amendments when he presented the 2018 national budget last December. The localisation law, combined with policy uncertainty, is largely blamed for the dearth of foreign investment in the economy in the last decade as foreign investors felt disadvantaged.

As a result, the economy has struggled to register growth levels which could impact positively on the lives of ordinary Zimbabweans.

Changes to the law are part of the new government's drive to open up the economy for investment through its "Zimbabwe is open for business" initiative which has received positive responses from investors, both foreign and local.

Finance and Economic Development Ministry Permanent Secretary Willard Manungo says the indigenisation law had been effectively changed following the gazetting on March 14, 2018 of the Finance and Appropriation Acts, through an extra-ordinary government gazette.

"The Finance Act gives effect to measures outlined by the Minister of Finance and Economic Development in the 2018 National Budget Statement and makes provisions to improve revenue collection and administration," Manungo said.

"Among other measures, the Act amends the Indigenisation and Economic Empowerment Act to restrict compulsory indigenisation to those enterprises engaged in the mining of diamonds and platinum. This amendment is consistent with the objective of promoting the Ease of Doing Business environment for attracting investment."

The government insists it had to maintain the shareholding thresholds in the platinum and diamond sectors because it wanted to first to establish the quantum of the resources the country possesses. In its first three months in office, Zimbabwe's new administration, led by President Emmerson Mnangagwa, has received investment commitments worth more than 3.0 billion US dollars.

Meanwhile, the president disclosed Monday that the government is crafting a policy to regulate the diamond mining sector as part of measures to ensure the country benefits from the precious stones.

Addressing Zimbabwean professionals living in Rwanda, President Mnangagwa said the move followed the revisions made to the Indigenisation Act which removed stipulations on local shareholding in multilateral companies operating in the various economic sectors except for diamonds and platinum.

"We are crafting a diamond industry policy after looking at Namibia, Botswana and Angola which are some of the countries that produce diamond," said Mnangagwa, who is in Kigali to attend an extraordinary summit of the African Union (AU) on Wednesday.

Source: NAM NEWS NETWORK

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