Foreign Investment in Zimbabwe: Indigenisation Issues

Minister of Economic Planning and Investment
Promotion, Hon Tapiwa Mashakada
 Minister of Information Communication and
Technology, Hon Nelson Chamisa.
 IAC Chief Executive Officer, FJ Dube
In line with achieving the main goals of the Mid Term Plan
2011-2015 of ensuring a transforming of the economy,
reducing poverty, creation of jobs, maintaining
macroeconomic stability and restore the economy’s
capacity to produce goods and services, the Ministry of
Youth Development, Indigenisation and Empowerment
[plays a critical role in assuring the achievement of these
 Under Indigenisation and Empowerment, the Government will focus on
Broad Based Economic Empowerment to ensure the majority of
Zimbabweans are integrated into the main stream economy and that they
become drivers and beneficiaries of the economic activities in the country.
 The vehicles that are being used to achieve Broad based economic
empowerment are:
› Community Share Ownership Scheme
› Employee and Management Share Ownership Scheme
› Direct Equity Participation
› Procurement
› Youth Development Fund
Community Share Ownership Schemes rather than Corporate Social Responsibility
represent genuine empowerment of local communities. Historically, rural
communities have been marginalized and patronized by mining business through
the so called Corporate Responsibility programme. Lets not dictate to communities
what to do for them but rather allow them to determine their own priorities.
The main objectives of the Community Share Ownership Schemes or Trusts are to:
 To enable communities to benefit from their God given resources.
 Reinforces the role of communities in economic development by enabling
communities to make decisions on their development priorities.
 To ensure Broad based participation.
The Community Share Ownership Schemes shall be entitled to 10% equity in the
mining businesses.
The Community Share Ownership Trust shall be entitled to Board representation in
each mining or natural resource extraction business.
Community Share Ownership Schemes shall be independent bodies responsible for
making their own decisions and shall negotiate their relationship with exploiters of
natural resources on their own.
• My
Ministry, the Ministry of Mining Development, the Ministry of Local
Government, Rural and Urban Development, the National Indigenisation and
Economic Empowerment Board and the World Bank will capacitate the
communities to take responsibility in developing their areas.
•Income generated through equity participation by the communities will be utilised
for the development and maintenance of socio- economic infrastructure such as
dip tanks, roads, schools, hospitals and clinics , water works and conservation
practices. Communities could come up with programmes for special interest groups
like the women, youths and the disabled.
•The Community Share Ownership Trusts shall have a Deed of Trust registered with
the Deeds office.
•Community Share Ownership Schemes should not be fake. The Minister shall
approve all Community Share Ownership Schemes.
•The Community Share Ownership Trust shall have the Chief as its chairperson and
the chairperson of the RDC shall be a Trustee. The CEO of the RDC shall be the
Secretary of the Trust whilst the rest of the Trustees shall not be from the RDC but
instead, from the community having representation of the youth, women and
and Management Share Ownership Schemes are established
in terms of Section 14 and 14(a) of the Regulations.
•The Purpose of the Employee Share Ownership schemes shall be to
ensure broad based economic empowerment by ensuring that the
workers participate by way of having direct equity participation in the
companies they are working for.
•Implementation of the Employee Share Ownership Schemes shall
indirectly lead to the increase in productivity levels in the companies and
low employee turnovers in companies that have implemented the Scheme
as employees derive more job satisfaction and thus resulting in stable
•Employee and Management Share Ownership Schemes shall have a Deed
of Trust registered with the Deeds office and specifying percentage
shareholding to be held by employees and/or Management
•ESOS facilitates Broad Based participation.
• To date Schweppes, Meikles Limited, Bikita Minerals, Mimosa, Sengwa
Mine, Blanket Mine and River Ranch Limited have all proposed Employee
and/or Management Schemes of different proportions.
promotes the procurement of goods from indigenous
•At least 50% of the goods procured by all private and public businesses should
be procured from indigenous Zimbabweans.
•The Ministry and the National Indigenisation and Economic Empowerment
Board will be working closely with the State Procurement Board to ensure that
the law is enforced and that the entrepreneurs producing goods and services
are empowered contracts to ensure the growth of indigenous businesses, the
betterment of livelihoods and the growth of the economy of Zimbabwe.
sets 51% indigenous shareholding in all strategic businesses as the long
term policy objective.
•All mergers, restructurings, unbundling of business, demergers, relinquishment
of a controlling interest shall comply with the 51% indigenous ownership
•Direct equity achieved fro the above stated transactions as well as from the
Employee Share Ownership Schemes and Community Share ownership schemes
shall be for the sole purpose of ensuring indigenous participation and
ownership in the economic activities of the country to ensure the ratification of
past injustices, economic growth, poverty reduction and ultimately, economic
•The coming up with sector specific frameworks is already underway having
gazetted the framework for mining as it is the most strategic sector but we are
now in the process of concluding frameworks for the Education, Agriculture,
Manufacturing and Communication Sectors with Tourism and Finance still being
worked on. This will ensure that the indigenous Zimbabweans participate in the
various sectors and ensure that the issue of poverty reduction is adressed
amongst the people.
reduce the wide gap between the rich and the poor and ensure economic
growth as well as broad based socio-economic growth, a national Sovereign
Wealth Fund is in the process of being set up. The fund will be financed mainly
by income from the nations natural resources.
mineral resources are finite, there is need to develop secondary
industries as alternative bases of development after the mineral resources are
depleted and this will be done through the Sovereign Wealth fund. The fund
will financing development programmes across the country this will contribute
positively stimulate the growth of Zimbabwe’s economy.
Medium Term Plan comes at a time when indigenisation and
Empowerment is in the process of implementing most of its
programmes in order to address the issue of Broad Based Economic
•Poverty reduction, stable employment awarding of contracts and
share ownership are issues that will be addressed through the various
vehicles of empowerment and the Ministry will ensure the Mid Term
Plan in relation to Indigenisation and Empowerment will be executed
and achieved by 2015!
•I Thank you!!