ED defends scrapping of indigenisation law provisions

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By Anna Chibamu

PRESIDENT Emmerson Mnangagwa has defended the scrapping of the 51-49 percent local/foreign ownership requirement among foreign owned firms operating in Zimbabwe, saying this was not aimed at disadvantaging locals.

He was speaking during a state media interview to mark 39 years of independence this past week.

“By removing the concept of 51 percent or 10 percent in the extraction of minerals, we have not abandoned the concept of creating an environment where our people will be able to interface as well as enter the mainstream of the economy,” Mnangagwa said.

The Indigenisation and Economic Empowerment Act was introduced by former President Robert Mugabe ostensibly to afford locals controlling stake in firms doing business in the country.

It has however been singled out as the main cause of the flight of foreign capital from the once prosperous country.

Since becoming the country’s leader on the back of a military assisted coup November 2017, Mnangagwa has tried to woo foreign investors back into the country under his “Zimbabwe is Open for Business” mantra.

To remove obstacles, Mnangagwa lost no time in scrapping provisions of the Act.

The President said this was far from a government attempt to remove any advantages that could have been aimed for local businesses.

“…We realise its critically important that our people should continue participating in their own economy. Those with their capital should not be forced to participate in an environment where they are forced to surrender without remuneration in the country.

“They should bring on board our people and this is negotiable. That is what happens worldwide.”

Mnangagwa is keen to see the country’s economy back on its feet following years of mismanagement under his former boss.

However, the Zimbabwean leader seems to be finding it tough due to inherent mistrust in his government’s systems by both locals and foreigners.