Zimbabwe Scraps Indigenization Policy, Except For Diamonds And Platinum

(IDEX Online) – The government has abolished the local ownership requirement for foreign investors, apart from the diamond and platinum sectors, in a big change in policy by the new administration announced by Finance Minister Patrick Chinamasa.

The indigenization law demands that 51 percent of firms created in important industries in the country be under the control of Zimbabweans. However, the law deterred significant foreign investment under the 37-year rule of former President Robert Mugabe.

With a huge jobless rate, new President Emmerson Mnangagwa announced that creating employment was one of his main priorities.

Presenting the country’s 2018 budget, Chinamasa said the Indigenisation and Economic Empowerment Act would be relaxed with the changes coming into effect in April 2018.

“Diamonds and platinum are the only sub-sectors designated as extractive,” Chinamasa said. “Accordingly, the proposed amendments will confine the 51/49 indigenization threshold to only the two minerals.”

“Zimbabwe is now open for business, and is putting in place supportive measures that seek to rebuild confidence and compete for investment, and enhance the economy’s competitiveness,” Chinamasa added.

He forecast a 4.5-percent expansion in gross domestic product (GDP) in 2018, up from a projected 3.7 percent his year, to be driven by agriculture and a raft of reforms.