PM spokesman defends statement on suspension of indigenisation regulations

Confusion is rife over the status of the indigenisation regulations as a result of conflicting statements made by the partners in the inclusive government. Robert Mugabe and Saviour Kasukuwere, the Minister in charge of indigenisation, have both denied that cabinet has suspended the regulations.

Mugabe is quoted telling reporters at the Tobacco Auction Floors in Harare on Wednesday: There is no nullification of the indigenisation and economic empowerment law, no nullification of the regulations which have been made. What is there is that the regulations are being studied by a committee of cabinet just to improve them, he said.

But on Thursday the Prime Ministers spokesperson explained on SW Radio Africa that no one in government had disputed the law: Its unfortunate that people are failing to comprehend something which is quite basic and simple. Maridadi said the partners in government are not disputing the indigenisation law which aims to correct economic imbalances, but that there is dispute over the regulations which will enforce the law.

He said this is what cabinet discussed earlier this week and it was agreed that there will be further consultations on the regulations before they are effective. So basically there is no disagreement on the issue of the indigenisation law and the only concern was raised on the issue of the regulations. The concern was in the current state they would not be able to attract investors. They would criminalise investors and they would not be as broad based as we would wish them to be.

So that was the issue that was raised in cabinet and it was debated and it was agreed that the indigenisation regulations in their current form would be set aside until there is further consultation, and after there has been some addition and/or subtractions only then would they be gazetted and they will become effective. Its not the indigenisation law, its the regulations.

The Indigenisation and Economic Empowerment regulations, which were tabled by Kasukuwere, seek to ensure indigenous Zimbabweans own 51 percent of companies worth over US$500 000.

A source close to the discussions said: What was there was just a blanket 51 percent, but proposals for improved regulations will centre on a scorecard, which will not only look at shares percentage but include looking at the number of women in the company, investment strategy, training, procurement, equity and social investment.

It is reported that a cabinet committee chaired by the Prime Minister will be looking at this process to improve the regulations. Much concern has surrounded these proposed regulations, with observers equating them to the land reform policy, which primarily benefited Mugabes ruling elite. There have already been reports of senior officials threatening lucrative companies with imminent takeover and investors have been running scared.