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The Minister for Small to Medium Enterprises Sithembiso Nyoni has expressed concern over the takeover of Small to Medium Enterprises (SMEs) by foreigners, a development which is contrary to Zimbabwe’s indigenisation laws.
Nyoni told the National Assembly last week that foreigners have displaced locals from the retail and wholesale sectors and indigenous people end up trading on streets and pavements. Said Nyoni:
<blockquote>I am going to be very unpopular as we look into the revised Indigenisation Act (2018).
There are certain sectors that are reserved for Zimbabweans but where you find a lot of foreigners occupying those sectors, a case in point is retail — if you go into greater Harare and this is where I will also need the support of other ministers, all stakeholders and even maybe the local Members of Parliament.
You will find that a lot of these places are occupied by foreigners who are into retail and wholesaling. The sector is reserved for locals while Zimbabweans are selling outside on the streets.</blockquote>
Initially, the Indigenisation and Economic Empowerment Bill signed into law On March 9, 2008, by the then president, the late Robert Mugabe gave Zimbabweans the right to take over and control many foreign-owned companies in the country.
<h4>More: <a href="https://dailynews.co.zw/govt-mulls-elbowing-out-foreign-smes/" rel="noopener noreferrer" target="_blank">Daily News</a></h4>

Pindula News

Govt Plans To Elbow Foreigners Out Of Retail And Wholesale Sectors

In an interview with Bloomberg, Zimbabwean Finance Minister Mthuli Ncube said they are removing the indigenisation rule which is discouraging investment.
Ncube said foreigners will be allowed to own 100% in a bid to revive investment. Said Ncube:
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<blockquote>We are removing that indigenisation rule, which is discouraging foreign direct investment. We say Zimbabwe is open for business; you can only be open if you allow ownership of 100%.</blockquote>
In a separate interview, Mines Minister Winston Chitando said the new rules could be extended to diamond mining. Impala Platinum Holdings Ltd., one of the biggest mining investors in Zimbabwe, is waiting for formal announcements regarding the changes, said spokesman Johan Theron.
More: <a href="https://www.biznews.com/briefs/2019/03/06/zimbabwe-scraps-platinum-indigenisation-rule-to-revive-investment">BizNews</a>
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Zimbabwe Removes Indigenisation Rule To Encourage Investment

Speaking to The Herald, Presidential spokesperson Mr George Charamba said that President Emmerson Mnangagwa has instructed the Chief Secretary to the President and Cabinet, Dr Misheck Sibanda to make sure that the Indigenisation and Economic Empowerment Act reflects Government policy position that the 51-49 percent requirement only applies to natural resource-based investments where foreign investors are required to have 49 percent shareholding, while Zimbabweans own 51 percent.
The policy position is contained in a Presidential statement that was issued by former President Robert Mugabe on April 11, 2016, where he clarified conflicting positions on the interpretation of the empowerment law.  In his Presidential statement, former President Mugabe said implementation of the Indigenisation and Economic Empowerment Act would be done in three sectors; namely: natural resource sector, non-resource sector and reserved sector.
More: <a href="http://www.herald.co.zw/govt-amends-indigenisation-law/">Herald</a>

Govt to amend Indigenisation and Economic Empowerment Act

The Parliamentary Portfolio Committee on Indigenisation and Empowerment recommended an amendment of the country’s indigenisation act to compel mining companies to contribute at least 25 percent to community share trusts. The committee also proposed the inclusion of statutory provisions for application of punitive measures against mining firms that fail to comply with the legislation by December.
Part of the recommendation reads:
<blockquote>The Ministry of Youth, Indigenisation and Economic Empowerment must immediately review the Indigenisation and Economic Empowerment Act to include a requirement of a minimum of 25 percent of the amount pledged by the qualifying companies towards the seed capital of the Community Share Ownership Trusts.</blockquote>
More: <a href="http://www.herald.co.zw/mining-firms-should-finance-share-trusts/">Herald</a>

MPs recommend amendment of indigenisation act to compel mining firms to finance share trusts

In an interview with The Standard’s Blessed Mhlanga (BM), Indigenisation minister Patrick Zhuwao (PZ) revealed that his ministry is no longer shutting down non-compliant companies because the companies will become extinct as they are not innovative. Below is an excerpt of the interview:
<blockquote>BM: You have been militant in the past, threatening to close down non-compliant companies.
PZ: I am an economist. I have looked at the facts and the facts themselves demonstrate that indigenisation does promote investment. it’s not militancy, it’s actually the facts and it’s unfortunate that some of those people have been reluctant to accept the truth.
BM: So are you still sticking with your policy of shutting down companies that have failed to comply as you did in the early days when you were appointed to the ministry?
PZ: What really is going to happen with a lot of those companies that are not innovative enough to recognise the direction the economy is moving towards is they are destined for oblivion, they are dinosaurs.
They will become extinct and the whole concept of indigenisation is not a concept that is peculiar to Zimbabwe, but it’s also a concept that the South Africans are taking on board now when they are talking about economic transformation.</blockquote>
More: <a href="https://www.thestandard.co.zw/2017/03/19/mugabes-nephew-huge-climbdown/">Standard</a>

Patrick Zhuwawo reveals why Govt is not shutting down companies that failed to comply with the Indigenisation Act

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