ZIMBABWE is working on a new law which seeks to harmonise investment laws with the controversial Indeginisation and Empowerment Act in a bid to improve foreign direct investment, a senior government official said yesterday.
Report by Bernard Mpofu
Addressing delegates during panel discussions at the first annual Medium Term Plan (MTP) implementation progress report, Charles Mujajati, an official in the Ministry of Economic Planning and Investment Promotion, said They had submitted a draft Investment Bill to the Attorney General’s Office, which the ministry expects to be enacted by next year.
The MTP (2011-2015) is a national economic blueprint crafted by the Ministry of Economic Planning.
“We are working on a revised Investment Bill and that process is at an advanced stage,” Mujajati said.
“Issues relating to clarity of the Indigenisation and Empowerment Act have been raised by foreign investors, so we hope that this law would harmonise the investment law and the empowerment law.
“The process is at an advanced stage and it is one of our top priorities as a ministry and that law should be enacted next year.”
He said the new law seeks to boost foreign direct investment, which currently stands at 3% of the Gross Domestic Product compared to the mid 1990s levels, which averaged 20%.
This new law comes at a time when foreign investors have raised fears over the country’s empowerment law compelling foreign companies to dispose 51% equity to locals.
Since the enactment of the empowerment law that has seen most foreign-owned manufacturing and mining companies submit compliance plans, foreign-investor participation on the Zimbabwe Stock Exchange has declined.
Most players in the fragile financial services sector are, however, yet to comply with the new law despite repeated threats by Empowerment minister Saviour Kasukuwere.
Last week, Reserve Bank of Zimbabwe governor Gideon Gono told investors attending the Zimbabwe Independent Banking Sector Survey Report launch that the country continued to face serious liquidity constraints due to limited FDI, shrinking Diaspora funds remittances and poor exports.