The regulations, which came into effect at the beginning of March, give foreign-owned companies, including banks and mines, 45 days to submit proposals on how they plan to sell 51 percent of their shares to black Zimbabweans within the next five years.
The German embassy in Harare said this week that the enactment of the Indigenisation and Economic Empowerment Act had forced the German African Business Association in Hamburg and the German-Southern African Chamber of Industry and Commerce in Johannesburg to put on hold their plans to bring German investors to Zimbabwe.
Regional manager for Southern Africa of the German African Business Association, Andreas Wenzel, said: “Under the current circumstances Zimbabwe is a ‘no go’ area for foreign investment.”
Given the ongoing discussions about the possibility of substantially revising the regulations, he does not exclude a rescheduling of the visit for the second half of this year.
Zimbabwe’s unity government has said it was reviewing the rules forcing foreign-owned firms to sell a majority stake to locals, because they were published prematurely, bypassing a cabinet committee that debates the legality of laws and their consistence with government policy.
There is however a silver lining: Germany’s participation in this year’s Zimbabwe International Trade Fair (ZITF) in Bulawayo will continue. ZITF 2010 is scheduled to run for 20-24 April and will be the 51st consecutive trade fair.
A group of German businessmen that visited Zimbabwe in September 2009 had been one of a few foreign business delegations demonstrating a willingness to re-engage in Zimbabwe.
German Ambassador to Zimbabwe, Dr.Albrecht Conze, underscored Germany’s overall interest in further developing bilateral trade relations.
“Germany used to be among the top three of Zimbabwe’s trading partners. This is where we would like to be again,” he said.
Since the establishment of the coalition government last year, Zimbabwe has begun to move back into the focus of German business interests in Africa, the ambassador said, adding: “I don’t want Zimbabwe yet again to become a blind spot for my fellow countrymen looking for investment opportunities.”
The empowerment regulations have caused serious consternation in business quarters. Economists and business commentators have sternly warned that they will discourage foreign investment at a time when Zimbabwe desperately needs it. More and more foreigners who were intending to invest in the country have indicated that the regulations are a significant obstacle to their plans.
The issue has sharply divided the troubled coalition government along partisan lines, with President Mugabe’s party insisting that there will be no going back on the regulations and Prime Minister Tsvangirai’s MDC calling for a review of the law.Post published in: Economy