Zim To Replace Indigenisation Law

The Government of Zimbabwe has announced its intention to replace the controversial Indigenisation and Economic Empowerment Act with a more “business-friendly” Economic Empowerment Act.

The announcement was made by the Minister of Finance Mthuli Ncube as he delivered the mid-term fiscal policy review statement and supplementary budget to parliament. 

While the new legislation is developed the Indigenisation Act will be amended to remove the diamond and platinum sub-sectors from the reserve list, providing for flexibility with regards to local versus foreign shareholding. 

"Government, through the 2018 Finance Amendment Bill amended the Indigenisation and Empowerment Act and platinum and diamonds are now removed from the reserve list and shareholding will depend on negotiations with investors,” the minister stated.

"Subsequently, the Indigenisation and Economic Empowerment Act will be repealed and replaced by the Economic Empowerment Act, which will be consistent with the current thrust "Zimbabwe is Open for Business," Ncube continued.

As the Zimbabwean economy struggles the mining sector remains one of the major contributors to growth, accounting for around 10 per cent of gross domestic product and 60 per cent of exports. However, the introduction of the Indigenisation Act threatened to put the breaks on investment in the sector.

In his address to parliament Ncube set out ambitious plans for the sector, stating that while it would take time for investments to translate into benefits that the government was aiming for a US$12 billion mining industry by 2023.