Harare — Government has been urged to provide institutional support to the recently promulgated Indigenisation and Economic Empowerment Regulations to boost mining output and enhance the country's economic turnaround, Zimbabwe Platinum Holdings chief executive Mr Alex Mhembere has said.

The indigenisation programme was introduced earlier this year to enhance indigenous participation in all sectors of the economy.

Addressing delegates at the recently ended Chartered Institute of Management Accountants annual conference in Nyanga, Zimplats managing director Mr Mhembere said that although the indigenous regulations were noble they were fundamentally reflective of top-down assumptions.

"The Indigenisation and Economic Empowerment Regulations have eroded business confidence to the extent of the perceived vindictive implementation of the law, as well as a general lack of institutional support for the programme.

"Other prevalent macro-economic issues that have dampened business confidence in the country include the lack of capacity for sustainable local bank finance, perceived country risk that is negatively affecting both venture and debt fund-raising activities. There is also a lack of appreciation by the officials on the lagging effect of capital spend and tax revenue, and no meaningful inflow of Foreign Direct Investment.

The Ministry of Mines and Mining Development and the Chamber of Mines are said to have agreed on a mining sector position that will see locals owning a minimum of 15 percent in foreign owned mining companies. The balance adding up to 51 percent shareholding will be met through credits attained from economic and social empowerment programmes by the mining firms.

Youth Development, Indigenisation and Empowerment Minister Saviour Kasukuwere has on occasions clashed with the Zimplats management over their indigenisation proposals which he dismissed as "crazy". Zimbabwe's mining output in respect of minerals including gold, coal, asbestos, iron, copper, and ferrochrome recorded significant decline during the 10-year period between 1998 and 2008. Nickel output however maintained relatively constant levels.

"It is however our firm belief that at this time, Zimbabwe's greatest need is for increased levels of foreign direct investment to create more employment in the country. We therefore urge the authorities to implement this law in a way that does not compromise Zimbabwe's desire to be seen as a preferred investment destination," said Zimplats recent statement.

Economist Mr David Mupamhadzi has indicated that the indigenisation concept should basically be used to reduce poverty and empower previously marginalised members of the society.

"The key issue is how to ensure that this process does not result in the disempowerment of the country's most productive sectors. There is need to ensure that the process is transparent and broad based, and that the process does not result in economic stagnation, company closures and job losses." Despite the economic impediments, Zimbabwe's mining output is anticipated to grow by at least 30 percent by year-end.