18 May 2013

Zimbabwe: Ultimatum for Foreign Shops to Indigenise

GOVERNMENT has given all businesses operating in reserved sectors of the economy under the Indigenisation and Economic Empowerment Act a six-month ultimatum to apply for indigenisation compliance certificates.

According to the Act, reserved sectors are agriculture (primary production of food and cash crops), transportation, retail and wholesale trade, barbershops, hairdressing and beauty salons, employment and estate agencies and grain milling.

Other sectors are bakeries, tobacco grading and packaging, tobacco processing, advertising agencies, milk processing and provision of local arts and crafts, marketing and distribution.

The ultimatum follows yesterday's gazetting of regulations that make it mandatory for all locally and foreign-owned firms in reserved sectors to apply for indigenisation compliance certificates .

No foreign-owned company would be given the licence.

This means clothing shops owned by non-indigenous Zimbabweans would be closed.

Pressure groups want the Government to act swiftly because citizens were being elbowed out of the clothing industry where Nigerians, the Congolese, and the Chinese own most of the shops.

Youth Development, Indigenisation and Empowerment Minister Saviour Kasukuwere announced the regulations in yesterday's Government Gazette following consultations between his ministry and the National Indigenisation and Economic Empowerment Board.

"Every business that commenced operating in any sector of the economy reserved for indigenous Zimbabweans under the Third Schedule on or after the fixed date shall apply for an indigenisation compliance certificate commencing from the gazetting of these regulations.

"Any person who operates a business referred to in subsection (1) without an indigenisation compliance certificate with effect from January 01, 2014 shall be guilty of an offence and liable to a fine not exceeding level four or to imprisonment for a period not exceeding three months or to both such fine and such imprisonment."

The regulations further state that the minister may direct any licensing authority to revoke, suspend or cancel the operating licence of a business operating in contravention of the regulations.

Any official of NIEEB, the Ministry of Youth Development, Indigenisation and Empowerment, law enforcement agents or any other person mandated by the minister of Youth Development, Indigenisation and Empowerment in writing may access any premises of any business reserved and demand any relevant documents for purposes of verifying compliance.

The regulations say any person who may interfere with this exercise would be guilty of an offence and liable to a fine, imprisonment for a period not exceeding two years or both fine and imprisonment.

NIEEB general manager for compliance Mr Zweli Lunga told The Herald that the regulations were meant to fish out foreigners who are operating in these reserved sectors.

"All businesses operating in the reserved sectors must apply for an indigenisation certificate. Those who won't produce that certificate by January next year won't be allowed to operate.

"We are giving ourselves six months to process those applications. We will only give indigenous Zimbabweans because these are sectors we feel do not require huge capital investments.

"Foreigners who apply will be turned down and we will ask them to close shop," said Mr Lunga.

This means that most of the clothing shops owned by non indigenous Zimbabweans would be closed.

Several pressure groups have already called on the Government to implement the Act in reserved sectors of the economy saying they were being squeezed out of the clothing industry as several Nigerians and Chinese own most of the shops across the country.

He said foreign-owned restaurants that do not cook local food would continue to operate while transport companies whose headquarters are outside the country would also be considered for exemption.

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