Debate on indigenisation in bad taste: Nhema

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INDIGENISATION and Economic Empowerment minister Francis Nhema has expressed concern over the current indigenisation debate saying it was being discussed through inappropriate channels.

Tarisai Mandizha
Business Reporter

This follows media reports quoting Information Minister Jonathan Moyo as saying government was in the process of reviewing the indigenisation and empowerment policy with a view to tone it down.

Speaking at the Institute of Chartered Accountants of Zimbabwe Chief Finance Officers’ Forum on Tuesday, Nhema said the whole debate was not supposed to be in the public domain.

“The debate in the paper left a sour taste in my mouth,” Nhema told delegates “It was not the place to discuss it.”

Nhema said the need for the indigenisation and economic empowerment programme was a direct consequence of the colonial experience and seeks to achieve the economic aspirations of the majority of the people for a better life and thereby guarantee their dignity as a people.

“When you look at indigenisation, don’t take it as an event, but take it as a lifestyle. Look at it on the improvements on the standards of living of our people.

Indigenisation is an ongoing process, don’t say it ends here and it begins here. But the whole issue is to improve the standards of living of our people. Indigenisation is not a two-year or five-year plan, but is a lifestyle, we have to improve the standards of living for our people,” Nhema said.

He, however, said the fundamental principle underlying implementation of the indigenisation and economic empowerment legislation was that the law provides that any equity being disposed of to indigenous investors shall be disposed of for value at mutually agreed terms and government was not involved in these discussions regarding commercial aspects of any transaction.

“Therefore, if an investor brings in $100 million, the indigenous parties do not take away $51 million from the foreign investor, but are expected to inject their own capital amounting to 51% of the business.”

He emphasised that government did not impose indigenous partners on foreign investors.

23 COMMENTS

  1. You are firing correctly minister though you sound over emphasised by your colleagues in cabinet.lts high time you put this decemination of information in order its a vital index to any serious investor.Meanwhile your stance on in definition is applaudable though you are partially silent on a clear policy.

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  2. so we must take it that the 49 percent the investor is bringing in is the 100 million $… That means the indigenous must put up over 100 million… are you smoking pot minister? This is why I do not work in the country of my birth 0 I don’t care what passport i have either… you are such a bunch of clowns that it is embarrassing to admit being from this country. All of the brilliant scholars this country has produced- not one of them has ended up in government… and why not have this debate in the press?? Surely this is a matter for the people of Zimbabwe, not the fat cats in government – you know nothing about what is good for the nation – only your own pockets and if it is being debated in the press then you cannot use your usual scheming and thieving ways to get what you want. Pathetic argument Nhema.. the rot begins and ends with you…

    • So you want the indigenous ‘investor’ to take 51 million from the investor. That’s what I call smoking shit pal.

  3. I’m glad the good minister has clarified two key issues that former minister Kasukuwere refused to officially clarify. The first is the confusion over the word “cede” in the Indigenisation law, which was vague and deemed by some investors to allow for the violation of their property rights by allowing forcible expropriation of their shareholding. The minister has clarified that shares in Indigenisation translation will only exchange hands for fair value. The second key issue the minister has clarified is that partners will not be imposed on the investors and that investors will choose their own indigenous partners and agree on mutually agreed commercial terms. That is good for investor confidence.

    The main challenge that must now be considered is that the financial sector has no liquidity to support major Indigenisation translations, and in any case, the limited scarce capital in the market would be crowded out by these deals from financing production and working capital into lining pockets on non-indigenous shareholders, who are likely to find ways to export the proceeds of the indegenisation deals out of the country. It’s a negative unintended consequence. A better way to promote Indigenisation would be to encourage new investments and support high potential indigenous businesses with potential to grow big.

    In the current scenario, there are few indigenous investors, if any, with capacity to finance their 51% share of even a $50 million deal at commercial terms. Yet the country needs a couple of large investments of $100 million of more. So none of the deals of this magnitude will ever materialise because of the Indigenisation laws, to the great detriment of the country. The laws were good politics but bad policies and need urgent review from a pragmatic standpoint. It’s time to put ideology aside for a short while and act in the economic interest of the country. Otherwise the chickens will eventually come home to roost after an economic collapse– capital is scarce in Zimbabwe and we need to attract as much external capital and as quickly as possible to turnaround the economy.

  4. The minister has not clarified anything but rather gave his own opinion, we must be guided by the legislation governing indigenization not opinions ,regulations stipulates that the 51% shareholding should be ceded to an indigenous person and future dividends will pay for the shareholding basically meaning you pay for the person to be your majority partner ,it is high time the gvt speaks with one voice have clear regulations that is easy to interpret what we have now is a ridiculous law that is preventing an economic growth resulting in indigenous people to leave in abject poverty.

  5. Firstly i congradulate Minister Nhema for sharing and trying to clarify this contentious issue of indeginization which threaten to wipe off every gain this country achieves since 1980.But honestly i dont think its wrong to discuss about indigenization in the public domain because the electorate deserves to know what its government is doing concerning economic matters which affects every citizen one way or the other,i personaly congradulate whoever let the cat out of the bag.i would want to ask honourable Nhema if there was the opportunity to ask him that is,what you told the delegates at that meeting your personal opinion of how the indigenization law should have meant because the current indigenization law is at parrarel with what you saying honourable minister.

  6. At long long last Zanu pf has accepted failure. Indeginisation policy was a election campaign tool. Minister Nhema clarified it. Yes that is positive thinking but still we want it in writing. Put it in black and white and then start calling investors with a favorable and clear policy.

  7. Well said minister, but we must have consistency in what is said and what is done. Government of Zimbabwe (GOZ) and ZPF are two institutions, in a democracy they are distinct but the reality in Zimbabwe is that they are one in the same. Donga watonga yanyanya everybody has some pronouncement to make regarding indeginisation.Please sit down as the government and come up with a single position regarding indeginisation, reduce it to writing with its attendant legislation, put in place transparent structures for new FDI and above all DISCIPLINE let us speak with one voice. We can write beautiful speeches, legislation etc but if there is chaos on the ground nothing I mean nothing will come of it.

  8. Minister Nhema, the whole problem of investment in Zimbabwe hinges on fundamentals of Economics.
    If you are to attract FDI you must be the best destination for that investment.
    Zimbabwe has to compete for that investment with every sovreign nation in the world.
    We need to make our country the most secure, the best operatiing envirnment with a cast iron guarantee that meddling politicians cannot come and interfere in the day to day running of the investment.
    The investor must be 100% certain that he will be able to realise his profits and recover his initial capital outlay.
    The destination for that investment must have Constiutional guarantees in place, an independant Judiciary and an impartial police force ready to protect that investment from greedy and predatory Chefs,
    Hungry and bone idle giovernment departments and Local Government Councils must be kept at bay together with the likes of our so called War Veterans trying to make a quick buck.
    Unfortunately Zimbabwe must rank amongst the worst investment destination as we have in place none of the above conditions. Until we do create that friendly investment environment, the investor will steer his money in other directions.

  9. Hey Francis why shouldn’t we discuss a topic that affects our daily lives? Perhaps you & your colleagues can learn something from us the ordinary people and start running the country more effectively. Who you should really have a go at is the genius who came up with this idea in the first place.

  10. This is a very silly minister, who sits and lets everyone else take control and wakes up to say something as silly as this. People should be debating your statement minister and not for you to be saying its in bad whatever. Love him or hate him Kasukuwere was way ahead of this level of performance, if it can be called that.

  11. No minister, this indigenisation is never a way of life.It’s never there to improve a common man’s life,never ever. It’s only for the ZANU-PF big wigs & that’s partly why it fails&will forever fail. No ordinary Zimbabwe or foreign investor wants to enrich your friends in ZANU-PF. In fact all ZANU-PF economic policies are evil. That is why we have MDC-T today. Even if you destroy MDC-T today,there will always be another probably stronger opposition party against your bad governance & self serving policies..

  12. If we can afford to chip in with the 51%, why do we have to wait for a foreign investor to bring in his 49% first before we venture into whatever business?51% of $100million is a lot of money and with such an amount you do not need anyone else to venture into business be it mining or manufacturing. Contradictions still exist on the indegenisation policy change, if you read the Herald today they will tell you indegenous people will still own 100% of mineral resources and yet we all know NEW ZIMSTEEL was recently awarded with 80% of iron ore deposits in Mwanesi for which they are planning to construct a railway line all the way from Beira to Chivhu so they can ship out and export the ore. Where is the 100% ownership there, and why do Nhema and Moyo keep contradicting themselves on this policy change? What is needed is a comprehensive gazetted article in the public media to stop once and for all the contradictions and put the matter straight for the benefit of all.

  13. my curiosity is at where we are finding these businesses of ours that require polycing and regulation.
    i would imagine this is an opportunity for foundation planning rather than policy buildings that do not create jobs for indegents don’t you think so too !!

  14. Nhema said the need for the indigenisation and economic empowerment programme was a direct consequence of the colonial experience and seeks to achieve the economic aspirations of the majority of the people for a better life and thereby guarantee their dignity as a people. This is Total Bull____.

  15. It is always gud fo locals to own their resources nd rightly so,however countries always compete to get investors,so we shld try to be an attract investment destination by offering attractive policies. The reality is that the investor will take his investment elsewhere. We need investors,job creation Period!True the indigenisation policy has many unclear aspects that need clarifying. Stakeholders in politics nd business shld sit down nd draft a clear document that benefits both Zimbabweans and investors.

  16. LIES, LIES LIES. Nhema said the need for the indigenisation and economic empowerment programme was a direct consequence of the colonial experience and seeks to achieve the economic aspirations of the majority of the people for a better life and thereby guarantee their dignity as a people.
    Absolute garbage. Lying fool. How can he talk of economic empowerment when all of us blacks in formal employment in Rhodesia were exempt from paying income tax and all black businesses were exempt from paying corporation taxes but we were all COMPELLED to pay income tax and black businesses were COMPELLED by ZanuPF to pay since 1980 at 45% of take home pay? Where the hell is the empowerment here?
    The whites used their money and unique skills to build companies. No blacks were barred from starting their own factories. It was never the colonialists’ fault that blacks were very poor. This is what they found when they came. People are being taken for a ride by these crooks. They give people the impression that people are going to have more money than before when the truth is we had more money in Rhodesia than now. None of the politicians were working in Rhodesia. The only people who will benefit are the politicians.
    There is no shortcut to riches.

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