New Zimbabwe (London)

18 May 2014

Zimbabwe: Indigenisation - Convert Rhetoric Into Action, Govt Told

A SENIOR World Bank official has said Zimbabwe stands to enormously benefit from its natural resources if the country adjusts its indigenisation and empowerment law to ensure it attracts foreign investors.

Outgoing WB country manager for Zimbabwe Lenneiye Mungai told Xinhua on the side-lines of a business forum in Harare last week that official statements from the government in recent months were indicating a softening of the stance on the empowerment law but challenged the government to convert the rhetoric into action.

Promulgated in 2007 with implementation starting in 2010, the empowerment law requires foreign companies to cede majority shareholding to black Zimbabweans. It has however been condemned in some quarters for scaring away foreign investors.

The law has so far been implemented in the mining sector where some companies have been forced to cede some shareholding to government and contribute to community share ownership schemes.

President Robert Mugabe last month clarified that the 51/49 percent threshold will only be implemented in resource sectors such as agriculture and mining while foreign investors in service sectors such as banking, would be allowed to have more than 49 percent shareholding in some instances.

Mungai said the soft approach on indigenisation, if eventually implemented, would be key in unlocking the economic potential of the country.

"What we are doing is waiting to see the implementation. I think there definitely is a sense that the whole strategy of getting Zimbabweans to do better business so that they can actually attract foreigners to come and work with them is something that I think is recognized by government," Mungai said.

"And I think it would unleash the capacity of Zimbabweans to make full use of their resources," he added.

Xinhua

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