Zimbabwe: Indigenisation Law to Be Amended

By Lloyd Gumbo [caption id="attachment_15107" align="alignleft" width="290"] Photo: New Zimbabwe
Finance Minister Patrick Chinamasa and IMF’s Domenico Fanizza (file photo).[/caption] Amendments to the Indigenisation and Economic Empowerment Act that will see line ministries approving indigenisation plans in sectors under their purview are set to be effected soon after Parliament approves some of them through the 2015 National Budget.Speaking in the Senate while steering the Finance Bill recently, Finance and Economic Development Minister Patrick Chinamasa, said the Ministry of Indigenisation and Economic Empowerment would only issue compliance certificates on the recommendation of line ministries after their assessment. He said the line ministries and that of Indigenisation and Economic Empowerment would monitor implementation after compliance with the law. “Madam President, the Bill also seeks to amend the Indigenisation and Economic Empowerment Act, in order to devolve to line Ministries the responsibility for approving indigenisation plans, prescribing indigenisation and empowerment assessment rating schemes and certifying transactions as being compliant with the Act,” he said. “These amendments are motivated by the fact that line ministries are generally more knowledgeable about the dynamics of the sectors which come under their responsibility. “They will be in a better position than the minister responsible for the Indigenisation and Empowerment Act to know the real needs of each sector, the inadequacies, strengths and weaknesses. So, it is for this reason that we devolving this responsibility to line Ministries.” Zanu-PF senator for Manicaland, Retired Lieutenant General Mike Nyambuya said while devolving indigenisation assessment to line ministries was a bold move, it would have been ideal to clarify the indigenisation law from a centralised authority. “Because again, if you leave it to line ministries and officials; you might create some room for rent seeking behaviour. It would be good if could lay down one solid policy which is friendly to the investors.

“We need fresh money in this country and FDI is one clear source of attracting fresh money into the economy. What I am saying is that, I would have been happier if the clarity had been done from a ministry point of view, rather than delegating it to the line ministry,” said Cde Nyambuya. Minister Chinamasa defended the proposed amendments saying line ministries were best suited to do the job but said what was important was for Government to guard against corruption by publicising ministries’ decisions in that regard. Chief Fortune Charumbira weighed in saying foreign-owned firms were naturally against indigenisation. “But I have one apprehension which is that, in the previous arrangement, there were some allegations and insinuations that the whole issue of indigenisation was characterised in some cases by corruption and I think it is in the way it was being done. “When we do this, I doubt if this might take away the issue of possibilities of corruption. We have just moved from one ministry to another ministry but as I am saying, it is good that we move to the line ministry but within that ministry, we need checks and balances. “That is the critical issue. So that they do not have to approach a particular director or officer and say, can we indigenise and then they say, no, not yet. The particular officer or director may end up being corrupted and end up saying, no, we cannot indigenise now but let us do that after 10 years or 20 years,” said Chief Charumbira. He said it was critical that Government comes up with measures to guard against corruption if the indigenisation and economic empowerment drive was to succeed. *Source allafrica/The Herald]]>