While the majority of companies have been forced to comply with the law, some foreign-owned banks and Chinese companies, particularly those involved in diamond mining in Chiadzwa, have not been touched.
Reserve Bank Governor Gideon Gono has tried to shield the banking sector from complying, saying the industry is facing viability challenges.
Economic analyst, Eric Bloch, told The Zimbabwean that the uncertainty of elections was hindering the full implementation of the indigenisation policy, which was allowing dozens of companies to operate without ceding shares.
The wrong signal
“It is difficult to push for the full implementation of the indigenisation policy with elections ahead, it will send the wrong signal to the international community and we will lose potential investors. This is, however, undermining the economy and I think the government should revisit the indigenisation law so that it can benefit both the locals and the investors,” said Bloch.
Emmanuel Mugadza, an economic analyst, said it was difficult to use a holistic approach in the implementation of the indigenisation policy as some sections of the industry were sensitive.
“The banking sector is very sensitive when it comes to the implementation of the indigenisation policy thus we should tread with caution. It is the key to the economy and if the shareholders for foreign-owned banks pull out, our economy will not survive,” said Mugaga.
Another economic analyst, John Robertson, said foreign-dominated mining firms were siphoning the country’s mineral wealth without tangible benefits for the local economy.
“I believe there are individuals benefiting from the selectivity of the indigenisation law. It’s surprising that some companies started operating in the country during the enactment of the act but they are not conforming to the act,” said Robertson.
Christopher Mugaga, an economic analyst, told The Zimbabwean:
“Implementation of the indigenisation policy cannot be a one-size-fits-all style because companies have different needs. It might appear as if there is selective application of the law but this is cooperate finance issue which needs to be revisited.”
No sacred cows
However, Minister of Indigenisation and Employment Saviour Kasukuwere said there were no sacred cows in the implementation of the policy as companies were expected to comply with the law.
“Companies, particularly in the banking sector should comply with our laws as non-compliance will no longer be tolerated. I have already warned the companies that are not complying to do so as government will soon take over,” said Kasukuwere.
He said they were targeting the banks namely Barclays, Stanbic and Standard Chartered, which were yet to comply with the indigenisation law.
“These three banks are on top of the list. All foreign banks and other companies must comply with the indigenisation law,” he said.
Anjin, one of the companies mining diamonds in the Marange fields in Manicaland province, is 90 percent owned by the Chinese and 10 percent by the Zimbabwean army.
Post published in: Business