Government has crafted a new Bill exempting foreign investors participating in infrastructure development from complying with the country’s indigenisation and empowerment laws.
REPORT BY VICTORIA MTOMBA
According to the Zimbabwe Investment Authority (ZIA) Amendment Bill, any investment in key areas such as energy and road networks that would have been approved by the authority would not be subjected to the equity law.
Under the empowerment laws, foreign-owned companies are required to cede 51% shareholding to locals and remain with at most 49%.
“The Bill will also amend the Indigenisation and Economic Empowerment Act to exempt new foreign investment in key infrastructure and strategic sectors from the requirements of the Act as long as such investment is licensed under the Zimbabwe Investment Authority Act,” reads the bill in part.
Economic Planning and Investment Promotion minister Tapiwa Mashakada recently said the government was working towards the harmonisation of the indigenisation and economic empowerment and investment laws amid concerns that the former was scaring investment.
“We have two conflicting pieces of legislation, that is the Indigenisation Act and the Investment Act. Cabinet approved the principles of the amendments and now the Bill has to be taken to the Cabinet committee on legislation this month,” Mashakada said.
The new Bill also seeks to bar any investor to start operations without ZIA approval.
It further aims to reduce bottlenecks in starting new business in the country.
“Any contracts they may enter into without such a licence will be voidable, and any licences and permits issued to them will be void. This will not apply to contracts entered into or licences, and permits granted before the Bill comes into force,” the Bill reads.
“And to make it easier for investors, the board will be able to allow them up to 90 days to enter into negotiations and preliminary contracts before they apply for an investment licence.”
The amendments of the Investment Act also seek to encourage increased investments in Zimbabwe by both domestic and foreign investors; to reduce administrative barriers that inhibit investments; to transform the authority by making it a one-stop shop for investors; and to ensure that all foreign investments were registered and approved by ZIA.
The changes would also re-establish export processing zones as special economic zones and industrial parks.