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Temba Dube Deputy News Editor
THE government has relaxed time frames for implementation of the 51-49 percent shareholding threshold prescribed in the Indigenisation and Economic Empowerment Act to attract more investors to the country.

Finance and Economic Development Minister Patrick Chinamasa yesterday said the move would ensure increased production and provide capital needed for re-tooling, re-capitalisation and overhaul of the antiquated machinery, and for value addition.

“It’s critical that we restate that the 51-49 percent ownership structure enshrined in the Indigenisation and Economic Empowerment Act applies across all sectors of the economy. But the government recognises that this may not be achieved overnight,” said Minister Chinamasa while presenting the 2015 national budget in Parliament yesterday.

He said the period necessary for compliance with the law would now be a matter for negotiation between the would-be investor and the relevant line ministry responsible for a particular economic sector.

Minister Chinamasa said new investment projects would first be processed through the Zimbabwe Investment Authority (ZIA).

He added: “Thereafter, ZIA would forward the investment proposal to the line ministry responsible for the sector/sub-sector for the line ministry to make the assessment concerning compliance with the indigenisation and empowerment policy.”

Minister Chinamasa said the new arrangement would guarantee consistency and predictability in government’s engagement with stakeholders and potential investors.

He said the agreement on the time businesses would take to achieve the 51-49 ratio was dependent on an indigenisation plan that would take into account the circumstances prevailing in the sector.

The Finance Minister said it was the responsibility of the line ministry to make the assessment on the investment concerning compliance with the indigenisation and empowerment policy.

He stressed the procedure also applied to existing or brown field investments— where a company or government entity purchases or leases existing production facilities to launch new production activity.

The minister said it would be on the basis of the assessment by the line ministry responsible for the sector or sub-sector that the compliance certificate in respect of the investment proposal would be issued by the ministry responsible for indigenisation and economic empowerment.

Able Dube, tax manager at Deloitte and Touche, said the development was likely to boost foreign investors’ confidence in the country.

“It’s the right thing to do as it looks at investment sector by sector, thereby taking into account peculiarities of different businesses. It encourages investment because time frames are based on mutual agreement,” said Dube.

He warned that the proposal’s greatest strength could turn into a weakness if proper monitoring procedures were not put in place.