FINANCE Minister Patrick Chinamasa has said that the development of the new Frameworks, Procedures and Guidelines for implementing the Indigenisation and Economic Empowerment Act was characterised by what he termed robust debate and included difference but in the end resulted in the production of an improved document, which will help to create a conducive investment environment.
The new framework was supposed to be announced on Christmas Eve at the Ministry of Youth, Indigenisation and Economic Empowerment but last minute differences between Chinamasa and Patrick Zhuwao saw the press briefing fail to take off. Following the disagreement Chinamasa went on to announce and later gazette a Framework under General Notice 394A of 2015 (not a Statutory Instrument) without the responsible minister Zhuwao.
Well-placed sources say there had been no material differences between what the two ministers were proposing except on emphasis (one was moderate while the other was more radical), the empowerment levy and the application of the law in the resources sector. The framework issued by Chinamasa had provision for dilution of equity in resource based sectors which Zhuwao felt was going against what President Mugabe has said.
“The 51% equity held by designated entities in the resource based sectors of the economy may be diluted to the extent of injection of additional capital by foreign shareholders on a pro rata basis subject to the condition that the designated entities shall be entitled to buy new shares in order to restore their shareholding to 51% within a period ranging up to 5 years, which period may be extended upon application in terms of Section 3 (a) of the IEE General Regulations,” read the Chinamasa statement.
Zhuwao on the other hand wanted greater articulation of the empowerment levy which he believes could rake in millions which will be used to advance the cause of the disadvantaged. Draft proposals seen by FinX had Zhuwao proposing that 10% of revenue should be levied on non-compliant companies. There were some sections which also believed that the differences were also motivated by party factional fights.
Sources say agreement between the two was reached last week Thursday at a meeting which was presided over by the chief secretary to the Office of Cabinet and President and this culminated in the announcement made this afternoon. Chinamasa subsequently withdrew the published notice.
“With this matter there has been robust debate, and this is how it should be. Now we have a much improved product which makes it conducive for investment. At the end of the day we are Zanu PF,” Chinamasa said.
The finance minister dismissed assertions that Zimbabwe’s economy was suffering from low investment and other ills as a result of the indigenisation laws.
“The economy is not suffering because of indigenisation, if any, it’s suffering because of lack of indigenous participation,” he said, adding the economy was going through a transition from the “old” foreign dominated economy to the “new” one which is controlled by locals.
“All that is required during this transitional period is discipline,” he said. Chinamasa said Zimbabweans must aim to control at least 80% of the economy.
“The frameworks are a milestone in the turnaround of our economy. As we go forward, we have now closed ranks to emphasize implementation,” the finance minister said.
“There will be no more excuses either because there are loopholes in the law, we expect all affected companies to comply.”
Chinamasa said clarifying the indigenisation laws had been the missing link in unlocking Zimbabwe’s
Reserve Bank of Zimbabwe governor, Dr John Mangudya also endorsed the simplified indigenisation framework.
“Having gone through these frameworks, I came to the conclusion that Zimbabwe is ready for business and is open for business,” he said. FinX
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