Black ownership not nationalisation: Mashakada

The Minister of Economic Planning and Investment Promotion Tapiwa Mashakada told Parliament that the law to increase black ownership in foreign-owned firms was not nationalisation, the 51 percent equity was negotiable and locals must pay for shareholding.

Tapiwa Mashakada
Tapiwa Mashakada

"So, the law basically says that that when a foreign investor comes, he or she must endeavour to make sure that 51 percent is ceded to locals and the ceding should be done for value," Mashakada told the House of Assembly. "It is not that the 51 percent has to be grabbed or expropriated or nationalised or invaded."

Makoni West MP Webber Chinyadza asked the minister to explain whether it was the policy of their ministry to assess the impact of certain policies implemented in respect to indigenous investment coming into Zimbabwe.

Mashakada said domestic and foreign investors had different concerns.

"Domestic investors are saying there are some projects to which they will not be able to contribute the 51 percent because there is no liquidity in the economy," Mashakada said.

"From foreign investors, the concern is that the 51 percent will effectively mean that the controlling interest of the company falls out of their control," Mashakada

said. "In most cases an investor wants to come and set up a project and remain in charge of the project. So they are saying, why can we not lower it to 50 percent or 49 percent so that we can still have control?"

Mashakada also said government was not speaking with one voice on indigenisation.

"Investors are complaining that there appears to be various messages coming from the same government on this issue of indigenisation," Mashakada said.

He told Parliament that minister Kasukuwere's sabre rattling and threats to cancel mining licences were spooking investors.

Indian conglomerate ESSAR has agreed to buy 54 percent in the Zimbabwe

Iron and Steel Company, with the government keeping 36 percent and 10 percent owned by minority investors. ESSAR is also planning to pump $4 billion into a plant to process iron ore from Zimbabwe's Mwanesi resource within the next five years.

The ESSAR deal is seen as the biggest foreign deal in Zimbabwe.

"We as a ministry are saying investors should be able to come and engage, this law is flexible," Mashakada said.

Post published in: Business

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