Economic Planning and Investment Promotion minister Tapiwa Mashakada wants the indigenisation and empowerment law amended to give the country a chance to attract much-needed investment.
Mashakada said for as long as the legislation remained law or is left in its current form, it would be difficult for the country to lure investors.
Although President Robert Mugabe and Zanu PF continue to advocate for the speedy implementation of the populist law, Mashakada believes there is need for self-introspection.
“Investment will not flow into this country. It’s an elephant in the living room,” said Mashakada.
“The sooner we amend it or repeal it, the better. We can’t market the country with this piece of legislation.”
According to the Indigenisation and Empowerment Act, locals must control at least 51% shareholding in all foreign-owned companies operating in Zimbabwe.
The indigenisation ministry has already concluded discussions with major mining firms and recently gazetted requirements for the manufacturing sector.
According to the recent regulations on manufacturing, firms with a minimum net asset value of $100 000 are required to release 26% of their shareholding in the next twelve months while 10% apiece should be released in the following two years whilst the remaining 5% should be ceded in the fourth year.
The regulations further provided that all foreign-owned companies should from October 28 submit proposals on how they intend to meet stipulated thresholds within 45 days.
Manufacturing companies include those in food processing, confectionery and textiles sectors.
Youth Development, Indigenisation and Empowerment minister Saviour Kasukuwere could not be reached for comment.
Kasukuwere is, however, on record saying the indigenisation and empowerment drive is not meant to destroy firms and the economy, but to undo the colonial injustices suffered by Zimbabweans.
Asked whether his ministry what not being overshadowed by President Mugabe’s overtures to lure investors into the country, Mashakada said: “This is an inclusive government where there are principals — President Mugabe, Tsvangirai and Mutambara. They all have a duty to articulate government policy. There is nothing sinister about Mugabe pushing to lure investors.”
“How can you say give 51% to locals? Mugabe will also get stuck. They will ask him how are they are supposed to invest when we have no control.”
President Mugabe this week held talks with investors in Hong Kong where is on a week-long official visit to meet potential investors.
He is also expected to visit Beijing where he is expected to meet more investors and make follow- ups on health and waterworks projects worth a total of $244 million.
According to a recent weekly market report by Interfin Securities, disorderly roll-out of the economic empowerment plan will likely result in capital flight from the local economy.
“We reckon that up until there is clarity in policy formulation and implementation, economic growth will be dampened as indicated by the current negative year-to-date return on the mining index which is likely to cascade down to other sectors as the local empowerment thresholds are published.”