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Senior Business Reporter
THE Affirmative Action Group (AAG) says the present state of the economy characterised by a liquidity crunch has hampered efforts to ensure foreign-owned businesses do not operate in reserved sectors.Under the Indigenisation and Economic Empowerment Act, the government announced in 2013 that the reserved sectors should be a preserve of local entrepreneurs.

The reserved sectors are agriculture (primary production of food and cash crops), transportation, retail and wholesale trade, barbershops, hairdressing and beauty salons, employment and estate agencies and grain milling as well as bakeries.

Tobacco grading and packaging, tobacco processing, advertising agencies, milk processing and provision of local arts and crafts, marketing and distribution are also reserved for locals.

AAG national vice president Sam Ncube told Business Chronicle yesterday that implementation of the Indigenisation programme and ensuring that reserved sectors were a preserve of the locals was slow because of lack of funding.

“The policy requires the reserved sectors to be in the hands of indigenous Zimbabweans but on the ground the government is vacillating on that issue because of the state of the economy.

“Implementation is lacking as the liquidity crunch remains the major problem facing the economy. The indigenous businesspeople are the most affected because they do not have financial resources to viably venture into the reserved sectors,” he said.

Ncube said implementation of the Indigenisation policy was, however, not an event but a process that would eventually succeed.

“We cannot thus blame the government in any way or the indigenous businesspeople,” said Ncube.

Youth, Indigenisation and Economic Empowerment Minister Francis Nhema  has warned local people against being used as “fronts” in fake indigenisation plans.

A front can be a business or person serving as a respectable cover for another, usually in a criminal style.

Official figures from the National Indigenisation and Economic Empowerment Board show that by February this year,   1,311 compliance applications had been received in reserved sectors of the economy with only 578 compliance certificates issued.

Recently, indigenous entrepreneurs have been crowded out in the reserved sectors by foreigners mainly Nigerians and Chinese nationals.

The government promulgated the Indigenisation and Economic Empowerment Act to address economic disparities that existed in the country as a result of colonialism.

Under the Act, all foreign-owned firms with a net turnover exceeding $500,000 must cede at least 51 percent equity to locals and those that fail risk  losing their trading licences or face legal action.