Commercial Farmers' Union of Zimbabwe

Commercial Farmers' Union of Zimbabwe

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Indigenisation Regulations Suspended For New Investors

Indigenisation Regulations Suspended For New Investors

Harare, July 19, 2012 — Government on Wednesday clipped the wings of Youth 
Development Indigenisation and Empowerment minister, Saviour Kasukuwere, in 
a charm offensive to lure investors amid revelations that potential 
investors were scared by the empowerment legislation.

The empowerment law states that locals should have 51% in all companies 
operating in the country and had unnerved investors needed to help rebuild 
the economy devastated by a decade of hyperinflation.

In his mid-term Fiscal policy presentation, Finance minister, Tendai Biti, 
said government had agreed to exempt new investors from complying with the 
clause that states that at least 51% should be given to locals to align the 
empowerment of the people to the country’s efforts to attract new investors.

“In respect of new FDI, FDI will not have to comply with Section 3 of the 
Indigenisation and Empowerment Act, that is, the 51% rule. However the 
Indigenisation and Empowerment Act and the Investment Act should be amended 
to require from foreign investor their own their localisation plans, be it, 
listings or share employee trusts,” Biti said.

Biti said the latest measure was arrived after government agreed that the 
country needs investors to expand the economy which has been 
underperforming. He said he was revising growth projections to 5,6% from the 
initial forecast of 9,4%. He said revenue collection would end the year at 
US$3,4 billion down from the original US$4 billion due to the 
underperformance of diamonds and the drought experienced this year among 

He said the first half of 2012 has been a sad balance sheet of unmarked 
targets resulting in a long winter of despair characterised by low business 
confidence and generally a business as usual approach.

He proposed austerity measures underpinned by a cash budget system. He said 
the wage costs consuming over 70% of the expenditure costs are an elephant 
in the living room so are foreign travel costs which at US$19 million 
continue outstripping other expenditures.

Biti said ministries that are collecting revenue should remit it to treasury 
accusing the ministry of Home Affairs singling out the Registrar General’s 
Office and Police as notorious.

Biti said in the second half of the year, there will be a freeze on 
recruitment and any dispensation will be subjected to concurrence of 
Treasury and the Public Service Commission.

Meanwhile Prime Minister Morgan Tsvangirai who is currently touring Japan 
said investors to Zimbabwe were expressing discomfort with the country’s 
indigenisation laws.

In a statement,released by the Prime Minister’s spokesperson, Luke 
Tamborinyoka, stated that throughout the meetings, the Japanese Minister and 
the business
executives of leading corporate had expressed concern over the controversial 
indigenisation programme, which they said affected both existing and new 
investment from Japan.

“The indigenisation law is an obstacle to investment by Japanese companies. 
We hope that you will review this law as it is affecting both prospective 
and existing Japanese businesses,” the statement quoted Economy, trade and 
investment minister, Yukio Edano.

Tsvangirai was quoted as responding: “We have many opportunities in mining, 
agriculture, tourism and manufacturing and our quest to attract investment 
has been marred by our bad politics and a poorly crafted empowerment law 
which has largely scared away investors. It is the implementation that has 
been chaotic, even though the law insists on ceding for value and mutual 
discussions as a precondition.”

“We have successfully managed to mitigate the excesses of this law but 
because we are an uneasy coalition, the ultimate answer will lie in a free 
and fair election as a precondition for a legitimate government in 

Tsvangirai will, on Thursday, hold a meeting with his Japanese counterpart, 
Prime Minister Yoshihiko Noda. On Friday he will give a lecture at the 
United Nations
University in Tokyo before proceeding to Wellington at the invitation of the 
New Zealand Prime Minister, John Key. The Premier will complete his tour in 
Australia where he was invited by the country’s Prime Minister Julia 


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