The Sunday Mail
The indigenisation law is clear and one of the cardinal pieces of legislation in Zimbabwe with respect to indigenising and distributing national wealth.
Honourable Christopher Mushohwe
Indigenisation law is very clear in critical sectors like the extractive industry – mining – where 51 percent (shareholding) is for indigenous Zimbabweans and 49 percent is for investors, whether through Government or individuals
It is a mechanism that gives both political and social stability. Many people talk about it as inhibiting Foreign Direct Investment, I don’t think that’s correct.
Like in any other country, an investor will want to know the relevant legislative framework within which investments can be made.
An investor who comes is presumed to have looked into the indigenisation law to know more about it and their areas of concern.
If it’s security of investment, then they would look at political stability.
They would also need to look at the human resources capital to manage their investments and ease of doing business.
These are things we should be siezed with. Indigenisation law is very clear in critical sectors like the extractive industry – mining – where 51 percent (shareholding) is for indigenous Zimbabweans and 49 percent is for investors, whether through Government or individuals.
The law is not scaring away investors as investors are coming here.
If any of them are displeased with a particular aspect of this law, Government is prepared to look at it.
For instance, some Chinese investors said they were unhappy about some areas and proposed that the 51 /49 threshhold could be worked out differently and we are looking into this.
In any case, what they are saying is provided for in the Constitution. It is not one-size-fits-all, it is only in the area of the extractive sector that 51 /49 applies.
In other sectors, proposals are considered case by case.
However, from day 1, some companies say they are unable to meet the 51 /49 threshold because “we have a big investment that requires a lot of capital”.
The law states clearly that the Act’s administering Minister can, on a case-by-case basis, look at issues and periods that can be relaxed.
The investor can start with majority shareholding and gradually cede shareholding. In fact, the investor can cede shareholding, except in mining where the resource in the ground is ours and that resource is used as our contribution, our investment.
But all other sectors operate as commercial businesses.
If one wants shares in a company in manufacturing, financial services or tourism, for example, one can put their money on the table.
Investors must choose their preferred partner and Government have no say.
We can only facilitate, but the negotiations between locals and the investor will be their arrangement.
We only give the certificate of compliance, ensuring the company complies with our indigenous law.
Further, they can be given a timeframe to change ownership gradually. This takes time, depending on the arrangement.
On natural resources, the goal is to make sure Zimbabweans from all walks of life benefit.
Principally, this creates stability – socially, politically and economically.
This is what our young men and women sacrificed their lives for and we will all say we are enjoying the fruit of our hard won independence.
Indigenous Zimbabweans are those who were economically-disadvantaged before 1980 on the basis of race and were excluded.
What we are doing is ensuring posterity will not say, “I am poor because my father was black. I am poor because there are no opportunities for me.”
The child of a white person will not say, “I am poor because there was a piece of legislation called indigenisation law.”
No, we want to level the playing ground so that there is harmony and peace in Zimbabwe.
I don’t know why people are not seeing it – our own less-privileged. I don’t know why anyone who is opposed to this law is not seeing it.
If, indeed, whites want their kith and kin here, they must support this law because it is the only guarantee for peace in future or safety of their investments.
It is the only guarantee for social cohesion and this is very clear.
President Mugabe has tried to explain this day and night, but, unfortunately some of the beneficiaries are not seeing it.
People should not scandalise valuable and good pieces of legislation like this one. We are doing our best to market and publicise this law.
Last Thursday, I was in the Midlands and I will be going to other provinces to make people understand this law.
More importantly, I have been meeting Ambassadors of different countries, explaining this law.
As is known, Ambassadors represent different countries and its important for us to send the message that the investment climate in this country is friendly.
I think it is not only the job of the Youth, Indigenisation and Economic Empowerment Ministry to make people aware that indigenisation is important for the stability of this country.
Those in industry must talk about it, everyone. It’s a collective effort for every Zimbabwean.
We, in this Ministry, have a responsibility to ensure that everyone complies with the law and other Government departments have roles to play.
Investors are not supposed to be afraid as no one will “grab” their investments.
In fact, they must see Zimbabwe as their choice of investment because there is peace and stability here.
The human resource capital is second to none and I am sure investors would want to go to a country with enough expertise to run their investments.
Investors need to come because we are clear on what we want. Our laws are very clear and we have said it before and repeat it here that: “Indigenisation is not one-size-fits-all.”
If there are concerns with regards to this law, we are prepared to listen.
We are the ones who made this law and are in a position to address genuine concerns. Zimbabwe has no difficulties with that one, but, of course, we have said we must deal with all the things which paint Zimbabwe negatively.
Things to do with red tape, corruption and the so-called inconsistency in our indigenisation law.
We are clear about what we want as a country and what investors expect.
No serious investor will rely on these fly-by-night media houses whose agenda we all know. Zimbabwe is peaceful and investors are not supposed to be afraid.
What I can assure them is their investments will be safe and secure because we have rule of law.
Like I said earlier, the only area where we don’t entertain negotiations is mining because as indigenous Zimbabweans, our contribution is the resource, hence the 51/49 percent threshold.
We can’t have someone bring his or her, say, US$100 million and we say to them, “Give us 51 percent.”
That’s not it.
We are saying to the investors, “If you come, your investment is safe, but we encourage you to partner locals.”
Besides, they choose who to partner and will not be forced to partner anyone.
We want to ensure our people work, not for them to get things for free just because they are black.
No.
If you are given the job, you must work. If you don’t, you will be fired.
This law is about tomorrow.
Some of us are aware of what colonialism was about, and this law is correcting that. People were rich not because they worked for it, but because they were whites and some became poor not because they did not have capacity, but because they were blacks.
The first thing an investor should know – no matter what sector they want to venture into – is the time it will take them to get the necessary approval to do business.
That is an area we need to take care of by ensuring we do not unreasonably and unnecessarily delay investment approval. Mind you, Zimbabwe is not the only country that can offer the particular investment area an investor might be looking for. Taking two, three weeks to approve an investment is shooting oneself in the foot as investors will not wait for that.
Why should we take more than five days to approve an investment proposal if it is straightforward, unless if it needs to be straightened out?
Most investors come after having determined the kind of investment they want and the kind of legislative framework they will be dealing with.
We should create a conducive investment environment, ensuring their return on investment is predictable and red tape is not tolerated.
They must be assured by both our policies and legislative framework that investments are secure; that we respect property rights as we do and in compliance with our Constitution.
◆ Honourable Christopher Mushohwe is the Minister of Youth, Indigenisation and Economic Empowerment. His views were taken from an interview with Sunday Mail Reporter Tinashe Farawo in Harare last week.
