Indigenisation: call to exempt economic zones

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INVESTMENTS in special economic zones must be exempt from compliance with indigenisation and other laws that are seen as scaring investors for the new government strategy to work, analysts have said.
Government plans to introduce special economic zones (SEZ) to draw foreign investment into the economy.
But analysts say authorities must leave out the contentious empowerment laws, which demand that locals be 51 percent owners in major businesses, if the zones are to attract meaningful investment.
Economist Kipson Gundani said there must be minimal government intervention on investment matters.
“They must liberalise the whole system and investments will flow,” Gundani said.
He said government must simply play its role of creating an enabling environment and leave the rest to the private sector.
Enforcement of property rights, Gundani said, is one major area government must work on which has seen investors shying away from Zimbabwe.
He said an unfriendly investment climate had resulted in the country failing to attract meaningful investment over the years compared to its neighbours.
“Let us remove all controls in as far as the special economic zones are concerned,” said former Zimbabwe National Chamber of Commerce chief executive, Innocent Makwiramiti.
“Our image out there is very bad and that will affect investor confidence. We have to go all out to spruce our image and convince investors that we are flexible.”
Black empowerment lobbyist and Affirmative Action Group executive director Davison Gomo expressed scepticism the strategy would accelerate investments but said the country had no choice but to give investors a “free” reign as a result of the desperate situation.
“SEZs are a great idea that has not really worked in most Africa countries,” he said, adding that if operationalised, the regions must be allowed to be “sovereign within a sovereign country.”
“I do not think indigenisation is one thing that will work in such an environment,” he said.
Besides the tax incentives, analysts said investors must also be excused from complying with labour laws, which make it difficult for companies to retrench even in cases of underperformance.Advertisement