Speaking to journalists at Harvest House in Harare, today the MDC shadow minister for Industry and Commerce, Tapiwa Mashakada, described the purported policy shift as a case of ‘too little, too late’.
“Our party does not believe that the Zanu (PF) government is capable of improving, neither does it have the political will to improve, the investment climate in Zimbabwe,” said Mashakada.
Introduced in 2008, the Indigenisation and Empowerment Act, required that all foreign-owned businesses operating in the country cede 51 percent of their shares to Zimbabweans.
Reports however indicate that government is in the process of reviewing the policy to facilitate sector-specific implementation, a development set to allow investors to recover initial capital investment, receive an appropriate return on investment and recoup operational costs.
Mashakada said Zimbabwe needs investor-friendly policies that make it easy for businesses to establish their ventures locally and contribute to the development of the country.
“Investors want to control their businesses and the proposed Production Sharing Model (PSM) and the Joint Empowerment Investment Model (JEIM), do not allow for that to happen,” he said.
Mashakada said these two models, borrowed from the Middle East, implied a 100 percent indigenisation threshold, which was even worse than the 51 percent of the indigenisation and economic empowerment.
“Instead of easing the indigenisation and economic empowerment policy, government is actually further tightening the screws. If the 51 percent threshold was a foot brake to investment, the PSM is a hand brake and it does not inspire foreign direct investment,” he said.
He said failure by government to come out clean and clarify its position on the ongoing policy shift was a reflection that it was not committed to amending the indigenisation laws.
“The question which remains to be answered is whether or not the 51 percent threshold is still in force or not” said Mashakada, adding that the Zanu (PF) government had no clear answer to that issue.
Commenting on whether the European Union would lift Article 96 of the Cotonou Agreement in November, a development which had the potential to see improved trade relations between the Zimbabwean government and the Western countries, Mashakada said it was highly likely that nothing would change.
“It is wishful thinking to imagine that western countries are going to lift Article 96 of the Cotonou Agreement. The challenge with the Zanu led government is that it does not want democracy, transparency and accountability,” he said.
He said government must work towards repaying debt to international financial institutions before the country can expect to get investment capital from these institutions.
Zimbabwe's investment climate deteriorated drastically with the decline in the economy over the last decade.
Post published in: News