AFFIRMATIVE Action Group (AAG) on Thursday said Zimbabwe was a safe investment destination which foreign investors should always consider as no one would take 51 percent of their business as prescribed by the Empowerment Act.
AAG president, Chamu Chiwanza said the empowerment group was comfortable with the new ‘temporary’ arrangement where local participation in foreign-owned companies is diluted as this would lead to increased volume of credit to productive sectors.
“We fully support government’s initiatives to come up with a comprehensive indigenization plan that will determine local ownership in foreign owned companies on a sector by sector basis,” he said.
Youth Development, Indigenisation and Empowerment Minister Francis Nhema will soon table before Cabinet proposals to deal with foreign ownership on a sector by sector basis.
Government’s understanding is that while there is temporary dilution it will have a plan through which they can increase local participation over a given period.
Chiwanza said Zimbabwe was at an opportune moment to attract foreign investment adding that local should also be empowered to play their part in economic development.
Investment decision is a function of an appreciation of the business environment now and into the future given by all manner of factors impacting on the operational environment.
The predominant use of the United States dollar removed the threat of currency risk for investors making Zimbabwe ideal for investment.
“The indigenization act has never been hard solid rock that cannot be adjusted if need be. Our government has friendly investor laws and is not in the habit of chasing investors away.
“What is need right now is to attract as much investment to address the liquidity crisis, high unemployment, revive companies and our infrastructure,” he said.
Finance Minister Patrick Chinamasa’s told a two-day conference organised by local think tank, SAPES Trust, there was no one size fits all for the indigenization exercise signalling a major climb down 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.Advertisement
“There was no one-size-fits-all, the only application of one-size-fits-all is that all sectors of the economy will have an equity model but what threshold will depend from sector by sector; over what timeline will also depend on sector to sector,” said the minister.
The minister had earlier said government does not intend to grab 51 percent of investors’ money which he said was being peddled in some sections of media.
“What is sometimes peddled is that you bring in your US$20 million and we take 51 percent of it. That’s nonsense. We have never said it and we will not do it. What we have said is that we want to encourage local participation on the basis of a given framework.
“The investors will pick their partner and also decide the price. That I think needs to be emphasized again and again. We are not going to get 51 percent of anyone’s money. It’s not the policy of this Government,” said Chinamasa.