Brunette Tshuma
In the World of Zimbabwe’s economic development, it seems the ratio of 51/49 has become a hot-button issue.
The contentious “indeginization” policy of 2007 which mandated foreign owned businesses to sale a majority stake to local Zimbabweans, has come under fire from stakeholders across the country.
Critics argue that the policy has stifled foreign investment and negatively impacted economic growth, leading them to call for a more balanced approach in the proposed new Economic Empowerment Bill.
The Ministry of Industry and Commerce on July 16th convened an Economic Empowerment Bill Stakeholders Consultative Exercise at a local hotel in Bulawayo.
This exercise brought together various Stakeholders including Non Governmental Organizations (NGOs), Development organizations, investors Captains of Industries, business owners and other Associations.
The purpose of the consultation exercise was put to discuss review loopholes of the “indeginization” bill as well as to assess possible means of improving the newly proposed Economic Empowerment Bill before being passed down as an Act by the President Emmerson Dambudzo Mnangagwa.
After the consultative meeting, the Indeginization and Economic Empowerment Act, which is the current law is to be repealed so as to come up with the Economic Empowerment Act.
The principles of this proposed current Economic Empowerment bill were approved by the Cabinet in 2023 and the Ministry of Industry and Commerce is in a new stage of drafting the act.
It is envisaged that the proposed bill will trasform lives, accelerate rural industrialization, reduce poverty and lead to economic growth as Zimbabwe lean towards realizing the Nation’s Vision 2030 of an Upper Middle Income economy.
Zimbabwe has been blessed with abundance of natural resources including soil, water, forestry and air to note a few and these have been recognized as a milestone in benefiting citizens and provinces at large.
It is however disappointing how the country has for long been wallow in poverty dispite having access to all these resources.
Following this reality, the consultative stakeholder’s meeting seemed to place much blame on the 51/49% ownership in investment.
This was noted to have been the main drawback in the economic growth of the country as investors retained their investments due to this policy, leaving the country with only a few investors willing to “take the risk”.
This view was supported by the Western Region Chairperson of Zimbabwe Congress of Trade Unions (ZTCU) Ambrose Sibindi in his statement saying,
“As the labour organisation, we have always been against the 51/49% policy as it is not investor friendly. Now we’re happy that if this bill goes through it will be a plus to the country”
The newly proposed bill is therefore expected to plough back to the locals through employment creation. One can question this motive though as the tamed ” industrial hub” has replaced it’s industries with churches.
To what extent therefore can the 51/49% policy be blamed for the harsh reality of Zimbabwean economy right now?.
The question which still remains unanswered is if Zimbabwe is offering enough for foreign investors to be willing to invest in the first place.
One can’t ignore the quantity and quality of services these investors are receiving from Zimbabwe. Are they tempting enough for one to take the risk of investing in an economy which seems to be continually going down and is non-benefitial for them?
No matter what percentage is being offered or retained, under good management of the country, both parties stand to benefit in the long run.
The never promising economy of Zimbabwe has contributed to investors’ withdrawal of their investments from the country as their interests may generate little or no profit for them in years to come.
Business owners on the other hand, in fear of the uncertainties of what tomorrow might bring continue to be skeptical of the 51/49% ownership as a once off strategy to remain on the safe side no matter the outcome of the investment.
Is it the 51/49 % ownership in investment or poor management of the country’s resources which stands as a major threat to the country’s economic development?
FOOD FOR THOUGHT.
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