“If we were to give investors more time, for instance 10 to 15 years, before they conform to the indigenisation policy, we would have more investors coming in. It is always difficult to explain to potential investors when it comes to the issue of indigenisation. From my experience in Japan and Korea the potential investors told me that it was not easy for them to bring $100million and cede $51 million of the capital,” he said.
Chimanikire said unlike others sectors of businesses, mining needed more capital and expertise.
“Mining needs a lot of capital and you don’t promote mining by grabbing shares in a mine when you don’t even have any input to steer production. What should be understood is that one can actually mine for 10 years without making profit but in the long run there will be results. In light of these concerns, it is important to give investors more time,” he added.
He said the mining sector had the potential to turn the economy around if it could implement the indigenisation policy gradually.
“I think we should start our indigenisation with at least 15 percent, with the main shareholder being the investor. We give the investor more time and the share holding percentage can be increased gradually,” advised Chimanikire.
The minister said lack of expertise in the country was a stumbling block in the progression of the mining industry.
“We don’t have the capacity to take over yet because we don’t have sufficient experts in the mining sector; most of them are working in neighbouring and international countries. Our institutions should train people who will take over the operations, instead of driving them away. Right now we have only a few experts in the industry and we rely entirely on the investor,” he said.
Economic Planning and Investment Promotion Minister, Tapiwa Mashakada, told The Zimbabwean, there was a need to temporarily suspend the indigenisation policy to facilitate much-needed investment.
“At the moment we need an inflow of capital to give our local industry sufficient time to grow and re-capitalise. This can only be achieved if we suspend the indigenisation policy,” he said.
Economic analyst, John Robertson, said the indigenisation policy was preventing foreign investment inflow and Zimbabwe had failed to attract investment over the years.
“I have always been critical of the indigenisation policy, it has been preventing the country from attracting meaningful investment. Our foreign direct investment has remained low and it’s time we revisit the indigenisation policy,” said Robertson.
Post published in: Business