Recently discovered ore deposits and soaring commodity prices are attracting miners from around the world to Africa. The Ministry also claims that giving ownership to the indigenous population will reverse the dependency on foreign aid and allow the locals to participate as not just labourers but also as shareholders. The result, according to the Ministry, will be sustainable growth as opposed to the unsustainable growth that results from relying on foreign aid without meaningful involvement from the local population. The Ministry also cites that owning majority shares in a company will allow it to exert control over what the company can or cannot do, but the laws and regulations of the country should already serve these purposes.
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This is not the first time the two ministers have publicly clashed over the policy. Chinamasa, through a government gazette on Christmas eve last year, announced changes to the indigenisation laws. However, as the deadline neared, Zhuwao backtracked on the amendments stating that the levy, which many people were already questioning as they felt it would lead to the collapse of companies, would instead be dumped as government moves to shutdown companies.
The heated verbal exchanges between the ministers reminded many of the fierce tiff between former indigenisation minister Saviour Kasukuwere and former RBZ governor Gideon Gono over indigenisation.
Kasukuwere and Gono traded barbs over the indigenisation of the financial sector in , with the former indigenisation minister threatening to shutdown foreign banks, which did not comply with empowerment requirements, while the ex-central bank chief declared that banks would not be touched. The latest differences came at a time Zhuwao had issued an ultimatum that foreign-owned companies which failed to comply would be shut down with effect from Friday last week. It also came at a time President Robert Mugabe was in Japan for a five day state visit where he was scouting for investment.
Mugabe was forced to clarify the indigenisation policy to Japanese business executives. We have abundant opportunities for investors and they should look forward to a mutually rewarding relationship with us. The policy contradictions have been criticised even by the state broadcaster ZBC, which last week broke with tradition when it invited analysts and experts highly critical of the indigenisation programme to feature in its news bulletins.
ZBC stated in its top story that Zimbabwe was in the habit of indicating left and turning right as was the case when Mugabe was in Japan trying to attract foreign investment, while Zhuwao was threatening to shut down companies. The spat between Chinamasa and Zhuwao shows that a policy paralysis has gripped government, according to economist and Bulawayo South legislator Eddie Cross. There are many ways of killing a cat.
Zimbabwe Indigenisation Policy
It is responsible for the institution of measures to ensure broad based participation by a broad spectrum of indigenous Zimbabwean population in the indigenous process. Funding According to the national indigenization and economic empowerment act, the funding was to provide financial assistance to indigenous Zimbabweans so as to provide finance for business start-ups, rehabilitation and expansion of small businesses. Through funding, the outgoing minister of Youth Development, Indigenization and empowerment, comrade Savoir Kasukuwere said more than projects were successful meaning more business were formed. So the funding scheme to the business able to acquire more products and increase in production.
Indigenisation policy ruins economy
Click to print Opens in new window In the Zimbabwean government passed into law the controversial Indigenisation and Economic Empowerment Act. The pre governments in Zimbabwe adopted racist policies, which resulted in unfair discrimination against non-white people. Any non-white Zimbabwean would therefore be an indigenous Zimbabwean. Threat of seizure Neither the act nor the regulations dealt with the price at which the shares ought to be transferred to indigenous Zimbabweans, leaving open the possibility of transfer without any compensation.