Zimbabwe: Zim Scales Down Indigenous Law, Calls for Outside Investments

Photo: CAJ
Zimbabwe President, His Excellency Emmerson Mnangagwa.
16 January 2018

Windhoek — Zimbabwean President Emmerson Mnangagwa yesterday called for outside investments into Zimbabwe, saying the indigenisation law, once perceived as an impediment to outside investments, has been scaled down.

"We now want Zimbabwe to catch up with the region and the rest of the world," said Mnangagwa. The new administration has also established special economic zones that provide a host of incentives, such as little or no taxes, to investors. "With these special economic zones we hope to attract global players in industry and commerce," said Mnangagwa.

Mnangagwa was in the country for a day visit to brief President Hage Geingob on the latest developments in that country after President Robert Mugabe resigned late last year. After paying a courtesy call on Geingob, Mnangagwa met with Zimbabwean nationals and business people in Namibia at a well-attended business forum at a hotel in Windhoek.

There, he informed the gathering that the new administration has scrapped Zimbabwe's indigenisation law, which limited foreign ownership of all local companies to just 49 percent. That law, President Mnangagwa said, would now apply only to diamond and platinum mining.

The indigenisation policy had previously applied to the extractive sector, the non-resource sector, which covered activities such as beneficiation and transfer of technology, as well as the reserved sector, where certain businesses were restricted to Zimbabwean citizens.

Mnangagwa was emphatic of the need to have assistance with the restoration of the Zimbabwean economy to once again be the breadbasket of the region. He called on Zimbabwean nationals outside Zimbabwe to help build the country's economy.

"Home is home and Zimbabwe is open for business. That is why I welcome all Zimbabweans back home to help with the rebuilding of the economy," said Mnangagwa.

He explained that the current presidency scaled down the indigenous law because it is focusing on addressing the national interests of Zimbabweans.

Commenting on the agricultural sector, Mnangagwa praised Zimbabwe for becoming food sufficient after the introduction of a Command Agriculture model, which provides farmers with all the inputs necessary for production.

"These inputs are not free as farmers have to repay the input costs once they harvest their crops," Mnangagwa explained to the crowded conference centre. He noted that Command Agriculture is a voluntary scheme that covers a range of agricultural crops.

In terms of Zimbabwe's ailing infrastructure, Mnangagwa announced that many of the country's major roads would be transformed into dual carriageways, but lamented a slow uptake of these massive projects.

"We are looking at public, private partnerships to tackle these projects," he said, adding that South Africa's TransNet has agreed to assist in rehabilitating the country's existing rail infrastructure and to construct new railway lines.

Responding to questions from the audience, Zimbabwe's Finance Minister Patrick Chinamasa agreed that basic economic fundamentals would need to be attained before the administration can even think about reintroducing the Zimbabwean dollar.

These fundamentals include raising the country's import cover from the current 0.75 months of import cover to at least 6 months, as well as addressing the huge trade deficit.

"We should have our own currency and it is certain that we cannot grow unless we have our own currency. The current currency regime is not sustainable," said Chinamasa.

Also speaking at yesterday's Business Forum, Zimbabwe's Ambassador to Namibia, Rofina Chikava, assured Zimbabweans living in Namibia and who want to invest in Zimbabwe that the embassy will facilitate wherever it can.

"This is an opportunity for all Zimbabweans to contribute to the development of Zimbabwe. We need to walk the talk of our ideas," she stated.

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