(TALKZIMBABWE) Over 460 companies comply with indigenisation law

Wednesday, September 29, 2010

(TALKZIMBABWE) Over 460 companies comply with indigenisation law

Over 460 companies comply with indigenisation law
By: TC
Posted: Wednesday, September 29, 2010 10:24 am

MORE than 460 companies have submitted their ownership structures in compliance with the requirements of indigenisation regulations while others are still in the process of doing so, a Government official has said. The Indigenisation and Economic Empowerment Act came into effect in March this year after its promulgation in 2008.

The Act seeks to redress the economic imbalances by empowering local citizens through setting a threshold of 51 percent as a minimum stake that indigenous people can have in foreign owned companies.

Under the Act, all companies with assets valued at US$500 000 and above are compelled to submit their share ownership structures and how they intend to dispose of 51 percent of the shares to indigenous Zimbabweans.

Speaking in a telephone interview yesterday, the Permanent Secretary in the Ministry of Youth Development, Indigenisation and Empowerment, Mr Prince Mupazviriho, said most companies were responding positively and expressed optimism that the process was progressing accordingly.

"Some companies have fully complied and others are yet to make submissions, but so far we have processed over 460 submissions countrywide," said Mr Mupazviriho.

"However, you need to understand that this is a process and there are companies that are still working on submitting their ownership structures, but all I can say is that there is progress."

Initially, Government had set the deadline for the submissions to within 45 days from 1 March before shifting it by a month to 15 May and finally to 30 June.

However, Mr Mupazviriho said the ministry took into account the fact that some companies were facing some viability challenges and as such the responses would not be uniform.

He added that the ministry has established a total of 13 sector committees whose task is to look into the specific company sector issues.

"You are aware that our companies operate in a difficult economic atmosphere and some are not operational at all while others operate on different scales.

"As a result, we have set up 13 sector committees countrywide and the role of these committees is to assess individual companies in their sectors. They look at companies in terms of threshold and then ascertain the time frame by which that company would be required to comply."

The enactment of the indigenisation regulations sparked widespread debate within the business community locally and abroad with mixed feelings over the merits of the law.

Pessimists criticised the law saying it was going to scare investors while others thought it was a polite way of dispossessing companies from foreigners.

Meanwhile, Government through the National Indigenisation and Economic Empowerment Board (NIEEB) carried a nationwide consultative outreach programme aimed at educating people about the merits of the law in improving the economic status of native Zimbabweans and opening business opportunities for the locals.

Government has also gone further by formulating policy measures that seek to capacitate local people and complementing the law by setting funding schemes such as the Youth Development Fund so that local citizens could obtain the 51 percent controlling stake.

Labels: INDIGENIZATION AND EMPOWERMENT ACT (ZIMBABWE), PRINCE MUPAZVIRIHO