Economy / Zimbabwe
Indigenization law to only apply to one sector
End of one-size-fits-all indigenization law as majority acquisitions pass
In a bid to increase business investor confidence, Zimbabwe’s controversial Indigenization Law will be limited to just one sector. The infamous 2008 law designed to empower the ownership rights of Zimbabweans has been seen as responsible for lowering the level of investor confidence since its implementation.
According to Walter Chidhakwa, Minister of Mines and Mining Development, the law will however continue in the mining sector. He said, “The mining sector remains on the 49/51 shareholding. There is no change.” While investor confidence has been dented, the list of recent majority acquisitions is long. In 2013 Japanese firm Kansai Plascon acquired 63 percent of local paint manufacturer Astra Holdings and in August of 2015 French yeast and fermentation manufacturer, the Lessaffre Group acquired a 60 percent shareholding in local yeast manufacturer Anchor Yeast Holdings.
The financial sector has also seen similar takeovers. Last year Mauritius-based Afrasia Bank Ltd increased its shareholding in Afrasia Zimbabwe Holdings to 62.5 percent. This legal change is part of attempts to ease business dealings for investors. A government proposal to amend the Companies Act would also see investor’s inquiries quickly dealt with by the Office of the President avoiding unnecessary bureaucracy. The Ease of Doing Business Agenda also aims to reduce the time of starting a business in Zimbabwe from 90 to 30 days.
