The business community is largely ignorant of the country’s laws including the Indigenisation and Empowerment Act, a situation that has led to a “culture of fear which deters us from utilising the law to assert our rights”.
Scanlen and Holderness law firm senior partner Sternford Moyo on Monday told delegates attending a one-day workshop in Harare organised by Mandel Training that the indigenisation law had had the most negative impact on the business environment since the inception of the inclusive government.
“The law is only an instrument. For it to be effective, it has to serve those meant to benefit from it,” Moyo.
“It (indigenisation law), perhaps, has deterred more investors than any other issue. It has been received with such a strong mixture of emotion, suspicion and fear that it has been very difficult for rational discussion on the way forward to take place.
“Very little attention has been given to possible ways in which to respond to and mitigate the negative effects of the legislation,” Moyo said.
Moyo noted that whites had not come forward yet the law was ready to declare them and their companies as indigenous Zimbabweans.
An indigenous person is defined as any person who before April 18, 1980 was disadvantaged by unfair discrimination on the grounds of race, and any descendant of such person, and includes any company, association, syndicate or partnership of which indigenous Zimbabweans form the majority of the members.
“Yet we have all accepted that the long definition is euphemism for black Zimbabwean without any critical analysis. No white businessperson has come forward to have their status as an indigenous person declared,” said Moyo.
“No company with white shareholders has come forward to have its shareholders declared to be indigenous persons, yet there are many.”
Moyo said the law states that companies with a net asset value of $500 000 are covered by it and considering the collapse of the economy if all liabilities are taken into account together with depressed value of assets few companies will be covered under the law.
Moyo said the business community was facing liquidity challenges due to the traditional reliance on bank loans.
“Our credit markets are largely unregulated. The shift which occurred in other markets from reliance on deposits to reliance on the credit market has not taken place. The huge opportunity presented by an unregulated market has not been taken advantage of,” Moyo said.
He said the country’s labour law made retrenchment expensive.
Speaking at the same event, Tapiwa Mashakada, Minister of Economic Planning and Investment Promotion, said the indigenisation policy remained a big challenge for the inclusive government.
“We are not giving the same message on indigenisation, part of government is taking it as expropriation, some are taking it as 51% while some are interpreting it as seizure and invasion. The disturbance at Lake Chivero last week shows us the things that are done due to the poor understanding of the indigenisation law. “I am glad police intervened,” Mashakada said.