Joint Venture Act to aid company revivals

Economic-Growth

Oliver Kazunga, Senior Business Reporter
INDUSTRY has welcomed the gazetting of the Joint Venture Act saying the new law will go a long way in resuscitating companies through financial and technical synergies.

The Joint Venture Act – expected to stimulate economic growth by unlocking value and supporting major investments across all sectors – was gazetted on Friday last week after being passed by Parliament and receiving President Mugabe’s assent.

The Act will provide for the implementation of joint venture agreements between contracting authorities and counter-parties while at the same time establishing a set of rules governing the public-private procurement process.

Confederation of Zimbabwe Industries (CZI) vice president Sifelani Jabangwe said the industrial representative body welcomed the Joint Venture Act as it would go a long way in boosting productivity in all sectors of the economy including agro-processing.

“CZI welcomes the promulgation of the Joint Venture Act, which we envisage would go a long way in boosting production across all economic sectors including agro-processing. As industry we see the Act as a framework through which local companies can create synergies with technical and financial partners,” he said.

“The Act will allow the agro-processing sector, for example, being able to venture into crop production as investors will either come in with technical or financial support.”

Jabangwe said in the past, potential investors have highlighted lack of clarity on some of the country’s investment policies as well as the ease of doing business.

“Because we now have a Joint Venture Act, it’s imperative that the country needs to improve on the ease of doing business as well as reducing the cost of doing business so that investors are attracted into partnerships with local companies,” he said.

It is also hoped that the Act will give impetus to Zim-Asset, the government’s economic blue-print and demonstrate commitment to implementing the policy.

The Act has also created a Joint Venture Unit, which will be a department of the Ministry of Finance and Economic Development and under direct control and supervision of the permanent secretary.

The unit will be responsible for considering project proposals submitted to it and assess whether or not they are affordable to the government or any of its parastatals or enterprises intending to enter such agreements, providing value for money, providing optimum transfer of technical, operational and financial risks to the prospective investor as well as whether they are competitive or not.

Association for Business in Zimbabwe chief executive officer Lucky Mlilo said: “As a business association we welcome such an initiative that will stimulate economic development and growth which is much needed in the country.

“It’s also pleasing to note that the Joint Venture Committee will be made up of officers from the key government ministries that is Industry and Commerce; Transport and Infrastructural Development; Energy and Power Development; Local Government, Public Works and National Housing; Justice, Legal and Parliamentary Affairs; Economic Planning and Investment Promotion as well as the Attorney General,” he said.

“This committee will assist the minister in formulating policy guidelines on joint ventures. Areas that we feel should be prioritised for joint ventures are power generation plants, transmission and distribution, water supply treatment and distribution systems, solid waste management and renewable energy.”

Mlilo added that the country should take advantage of the benefits that exist in joint venture projects such as entering related businesses that previously presented high barriers to entry, leveraging existing technologies and patents developed by other companies and sharing the risk of high-leverage, but uncertain ventures.

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