INDIGENISATION minister Francis Nhema has said foreign banks operating in Zimbabwe are not obliged to cede 51 per cent shareholding to locals under the country’s controversial indigenisation law. Instead, Nhema said, the banks’ involvement in the empowerment exercise would be as per his discretion as the responsible minister. Nhema said financial institutions would enter into “negotiations” with his ministry on how they could play a part in government’s black empowerment programme.
He was speaking at a policy dialogue forum organised by Ibbo Mandaza’s Southern African Political Economic Series (SAPES) Trust Thursday evening. Application of the 51 percent indigenisation requirements to foreign banks sparked disputes between Zanu PF ministers and former central bank governor Gideon Gono who urged a different approach with regard to the financial sector.
Thursday’s SAPES dialogue, which came after the Zanu PF hierarchy banged heads over the contentious policy at a politburo meeting held in midweek, was attended by foreign ambassadors and some well to do individuals from both business and the academia.
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Nhema said the indigenisation policy would only affect foreign businesses exploiting the country’s natural resources such as mining, fisheries and plantations as opposed to banks.
“It’s in the none natural resources orbit of things and therefore we will discuss, negotiate and understand how they would want to achieve what we set out to achieve either through credits, the stock exchange or through their employee share schemes,” Nhema said.
“It’s more of the instruments now. If you look at banks they have their own employee share ownership schemes which in some cases they have already done; in some cases, its 10 percent, in some cases 15 percent anyway and that qualifies in the indigenisation and empowerment process.”
Nhema was however at pains to convince guests the Zanu PF wealth redistribution law was not being amended. Instead, he said, it was only being “reemphasised”.
Information minister Jonathan Moyo, a fortnight ago, said the law was being revised according to the changing dynamics.
But Nhema refused to drawn into any comment involving Moyo’s remarks preferring to “speak for myself”.
He however disappointed when he failed to adequately explain key issues in the law, opting to dedicate his one and a half hour long speech to pleading with the guests to accept the law and to trust the Zanu PF led government.
The minister said the fear that has accompanied Zimbabwe’s empowerment law since its enactment a few years ago was more out of general misunderstanding over its intentions.
Nhema also said companies that are already involved in empowerment initiatives would be spared from the indigenisation requirements subjected to others.
He singled out giant shoe manufacturer BATA which has supported 120 small businesses through training and resources.
He then went into a begging mode, imploring foreign investors to consider setting up businesses in Zimbabwe.
“We are not there to shut down companies, it’s not in our interest; we are not there to victimise anyone, it’s not in our interest,” Nhema said.
“But in the process of achieving the goal that we have set out, we are saddled with people who might not appreciate our goal and hence sometimes there is unnecessary misunderstanding and confrontation.
“We seek good partnership, win-win situation; we seek an understanding in business, we seek an understanding from you in the process of empowering the majority of our people.
“My appeal really is that we work together for mankind, we work together to improve the implementation of this document in the spirit … humanly spirit in which it was designed, not in the vindictive manner seemingly being portrayed;
“… not in the discriminatory manner seemingly being portrayed, no, but in the harmonised spirit that we all have a right, we all must have opportunities to have a better life.”
Zimbabwe’s empowerment programme took off on a radical note with President Robert Mugabe threatening to “kick-out” foreign business enterprises that do not comply with the indigenisation laws.
But economic reverses following last year’s general elections forced a rethink within a government now failing to pay its workers on time while companies continue to shut down due to viability problems.
Foreigners have however demanded more than just spoken assurances from Zimbabwe’s unpredictable rulers before they can commit their money to the country.