FOREIGN-OWNED companies operating in Zimbabwe are now required to surrender at least 10% of their equity to locals in partial compliance of indigenisation and empowerment regulations, the Government Gazette has stated.
Report by Bernard Mpofu
The new regulations carried in a newly gazette statutory instrument could bring to an end the debate of the legality of the mandatory threshold following an earlier attack by Finance minister Tendai Biti over the schemes.
The community share schemes form a key part of the indigenisation programme being pushed by Empowerment minister Saviour Kasukuwere, but bitterly opposed by Zanu PF’s coalition partners.
“The minimum share that an owner of a business wishing to use the qualifying scheme or trust shall be ten per centum (10%) of the net asset value of the business in questions,” reads SI 66 of 2013.
Major mining companies, among them Zimplats, a unit of South Africa-based Impala Platinum, Unki and Mimosa, have pledged to donate up to $20 million to the schemes as part of plans to comply with the country’s indigenisation laws which compel them to transfer majority control of their Zimbabwe operations to locals.
Biti, who doubles as secretary-general of the Prime Minister Morgan Tsvangirai-led MDC-T crititicises the empowerment policy as populist and aimed at hoodwinking the electorate ahead of the forthcoming general elections.
In January, the Finance minister was quoted by a wire services saying: “In the indigenisation and empowerment act, you will not find the word community share trust, you will not. Then you come to the regulations, statutory instrument number 30 of March 2010 that was passed or enacted by Saviour Kasukuwere, again you will not find the name community share trust.”
Kasukuwere, however, argues that the schemes are aimed at forcing companies to invest in the development of communities where they operate.