- Conflicting interpretations of laws hurting market confidence
- Banks to contribute by boosting lending to key sectors
Zimbabwe sought to clear up confusion over black empowerment policies, suggesting some flexibility for banks and mining companies already operating in the country in implementing laws for local black investors to hold majority stakes.
“Conflicting positions in the interpretation of the Indigenization and Economic Empowerment Policy have arisen as of late,” according to an e-mailed statement from Information Minister Chris Mushohwe. The statement reflected a policy directive by President Robert Mugabe, he said.
“This has caused confusion among Zimbabweans, the business community, current and potential investors,” undermining market confidence, according to the statement.
The government said in September that it would make black empowerment laws enacted six years ago more flexible as it tried to drum up investment amid an economic crisis that has seen the economy shrink by about half since 2000. The International Monetary Fund, which is re-engaging with Zimbabwe, has urged the government to better explain its policy on black empowerment.
Financial institutions are expected to contribute by lending to priority economic sectors and through employee share-ownership policies, while existing privately-owned miners must keep 75 percent of the gross value of exploited resources as “local content” retained in the country, such as paying salaries and taxes or via procuring goods and services domestically, according to the statement on Tuesday.
New miners will be required to offer or sell 51 percent of their shares to black Zimbabweans. Companies outside the natural resources sector, including financial-services businesses, will negotiate empowerment “credits or quotas” with the appropriate government ministries, according to the statement.
The directive comes after the April 1 deadline set by Indigenization Minister Patrick Zhuwao for foreign- and white-owned companies to be fully compliant and face audits showing they had majority black ownership.