HOPES that the Indigenisation and Economic Empowerment Act would be amended before next year’s elections were this week dashed after President Robert Mugabe skirted the law in his legislative agenda for the final session of the current Parliament.
The law, which seeks the transfer of majority control of all major businesses, including mines and banks, has been criticised for discouraging foreign investment. The law has had a deleterious effect on the economy, yet government has only managed to consummate just a handful of indigenisation transactions. In April 2016, Mugabe admitted the law, passed in 2008, was confusing investors and undermining market confidence.
This was after a series of public spats between Indigenisation Minister Patrick Zhuwao on one hand, and Finance Minister Patrick Chinamasa and central bank governor John Mangudya, on the other. In his statement clarifying the ownership policy, Mugabe announced more flexible terms for banks and mines. Despite Mugabe’s undertaking, made when he officially opened Parliament in September 2016, that the local ownership law would “be amended to bring it into consonance with enunciated policy”, he made no reference to the matter in his latest address.
Economist, Kipson Gundani, said the country was shooting itself in the foot by procrastinating on the amendment of the Act. “The President clarified the law, but it’s unfortunate that it is yet to be amended. When investors consider destinations to invest they look at the laws of the country and the President’s clarifications are yet to be gazetted,” he said. “This sends a mixed signal to investors and it is important that the law be amended as this gives certainty on the application of the law,” Gundani added.
Opening the last Parliamentary session before elections due by August next year, Mugabe outlines a legislative agenda that includes the Mines and Minerals Amendment Bill, Mineral Exploration and Marketing Exploration Bill, Public Entities and Corporate Governance Bill, among 25 proposed laws. “To enhance national economic competitiveness and the country’s appeal as an investment destination, government has embarked on reforms to improve the domestic business environment,” Mugabe said.
“A number of identified supportive legislative amendments have already been forwarded to this august House for action.” He cited the Insolvency Bil, Judicial Laws Amendment Bill, Estate Administrators Bill, Shop Licences Bill and proposed changes to the labour law. “The many pieces of legislation for tabling during this session certainly mean hard work which demands absolute commitment and diligence from all Members of Parliament and that includes my ministers as well. We, therefore, expect robust and well-informed debate from all members, who should always be present, punctual, disciplined, professional, and of impeccable Parliamentary conduct,” Mugabe added.