Britain warms up to indigenisation

Britain warms up to indigenisation

BRITAIN has endorsed the refined indigenisation regulations in a major sign of thawing relations between London and Harare.
The stance could trigger renewed investments from the Europeans that have previously attempted to denigrate Zimbabwe’s empowerment programmes.
The new indigenisation regulations are meant to improve the ease of doing business in the country and attract more Foreign Direct Investment.
Finance and Economic Development Minister Patrick Chinamasa and Youth, Indigenisation and Economic Empowerment Minister Patrick Zhuwao announced the refined regulations early this month.
The British embassy in Harare said the United Kingdom welcomed Government’s move to clarify the indigenisation regulations.
“The United Kingdom welcomes the intention by the Government of Zimbabwe to simplify and clarify the indigenisation regulations.
“Policy consistency on the implementation of the Act is fundamental to the ability of Zimbabwe to attract much needed investment.
“. . . We therefore welcome the Zimbabwe Government’s plans to consult further with the business community.” the embassy said via email.
Following the deals that were signed between Zimbabwe and China at the end of last year and the opening up of funding negotiations with the Bretton Woods institutions, Zimbabwe expects to register significant economic stimulating activities this year.
Last month, Chinese President Xi Jinping visited Harare and signed several deals worth billions of dollars.
His visit came as Zimbabwe was fine tuning its indigenisation regulations to lure more foreign investors.
Several business delegations across the globe have been trooping to the country in search of investments despite earlier reports by some Western countries that the indigenisation law was scaring away investors.
Zimbabwe passed the Indigenisation and Economic Empowerment Act in 2008. The Act requires foreign owned businesses with a net value of at least $500 000 to cede 51 percent of their shareholding to locals so as to empower indigenous Zimbabweans.
The indigenisation law is facilitating stability in various sectors.
Government is on record saying that the law is not a one size fits. However, in critical areas such as the extractive sectors, locals are entitled to 51 percent as they own the mineral resource.
lnvestors can come in with 49 percent through capital investment.
All other areas are reviewed on a case by case basis by the administering minister.
However, there had been concerns that certain sections of the law did not entice foreign investors, resulting in efforts to address the shortcomings.
Last year, foreign owned companies operating in the country said the indigenisation mantra had not negatively impacted on their investments and operations.
Among the numerous companies that gave the nod to the indigenisation law are Caledonia Mining Corporation, ABB Southern Africa and PPC Cement, among many others.
In the new regulations, foreign firms are expected to have submitted their indigenization plans by March 31, 2016.

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