Brian Latham, Nasreen Seria and Antony Sguazzin
ZIMBABWE’S government would publish industry-specific limits on ownership in its black empowerment laws within months, with foreign-owned mining companies required to cede at least 51 percent of assets, Finance Minister Patrick Chinamasa said last week.
“Mining will be treated differently, because the mineral is ours, it belongs to the state,” Chinamasa said.
Zimbabwe is struggling to attract investment in a nation that holds the world’s second-largest chrome and platinum reserves, partly due to policy uncertainty related to its so-called indigenisation laws.
The International Monetary Fund said earlier this month that Zimbabwe must provide more clarity on the rules to investors and relax labour laws in order to restore confidence in the economy.
“Any investor who comes to exploit our natural resources will be treated differently than for example an investor that’s coming into banking or an investor coming into manufacturing, who is coming with his capital, with his equipment,” Chinamasa said.
Anglo American Platinum, Impala Platinum Holdings and Rio Tinto are among companies mining in the country.
Chinamasa is forecasting economic growth of 3.1 percent this year and 3.2 percent next year.
“We have done a lot of work which we need to finalise to clarify” the indigenisation laws. “It’s to clarify that it’s not a one-size-fits-all. There will be a sector-by-sector approach.”
The indigenisation law requires foreign and white-owned companies with assets of more than $500 000 (R5.47 million) to cede or sell a 51 percent stake to black people or the country’s National Economic Empowerment Board.
The government is unable to curb the wage bill, which is estimated at about 76 percent of state expenditure.
While it should ideally be about 40 percent to 50 percent, most of the wages are paid to teachers and health workers. – Bloomberg