GOVERNMENT has once again signalled a major climbdown in its empowerment and indigenisation policy with Finance minister Patrick Chinamasa assuring foreign investors that no one would take 51% of their business as prescribed by the Empowerment Act.
Chinamasa said Indigenisation minister Francis Nhema was already working on a sector-by-sector indigenisation programme as a way of luring foreign investors into the country.
Chinamasa’s assurance made on Monday in Harare at the two-day conference organised by local think tank, SAPES Trust, signals a major climbdown on the party’s robust one size-fits-all indigenisation programme that observers say was the reason foreigners shunned investing in the country.
The conference ran under the theme Enabling Environment, Consolidating Constitutional Reforms and Strengthening National Institutions.
“We are (also) inviting investment in water, power generation, roads, railway network, irrigation infrastructure, information and communication technology and the government will invite operators through build-operator-transfer skills,” Chinamasa said.
“Indigenisation minister Francis Nhema will put a proposal to the Cabinet, sector by sector, and government is quite comfortable with the injection of foreign capital in the banking sector because it will increase the volume of credit to the productive sector,” he said.
Zanu PF used the indigenisation programme as its main message in last year’s elections which it proceeded to win against its main rival, the MDC-T led by Morgan Tsvangirai, in a watershed poll that ended the inclusive government between Mugabe, Tsvangirai and the MDC led by Welshman Ncube.
But after the elections, Zimbabwe’s economy showed signs of distress as the country failed to attract foreign direct investment due to the indigenisation programme championed by the then Youth, Indigenisation and Empowerment minister Saviour Kasukuwere.
As the country continues to experience an economic downturn, former South African President Thabo Mbeki made a surprise visit two weeks ago where is believed to have advised Mugabe to tone down the indigenisation rhetoric to lure investors and rescue the economy.
Chinamasa’s remarks on Monday could be an indication that the cash-strapped government is planning to revise the empowerment programme and dump the one-size-fits-all strategy in order to lure investors.
Mines have already been cowed to cede 51% of their shares to locals, while a move to do the same in the financial services sector created serious confrontations between Kasukuwere and Gideon Gono, the then Reserve Bank of Zimbabwe governor.
“The government is committed to assisting in reforming and building the public service capacity, not least improvement in service delivery in all sectors, effective and quick decision-making and the eradication of self-defeating red tape and corruption,” Chinamasa said.