adminLivingstone Marufu—
THE year 2016 ended yesterday and despite economic challenges, there were several indicators showing that better days are coming.Chief among the highlights was the resumption of operation by the Zimbabwe Consolidated Diamond Company (ZCDC), the clarification of the Indigenisation and Economic Empowerment Act by President Mugabe, the introduction of Statutory Instrument 64 of 2016 and bond notes.
ZCDC unveiling
Mines and Mining Development Minister Walter Chidhakwa ordered all diamond mining firms that were operating in Marange to cease operations in November 2015 and announced that Government would establish the ZCDC, to replace the miners.
In March, ZCDC commenced operations and produced over 100 000 carats in its first two months.
Government highlighted that all revenue from the mining activities of the merged company will now accrue to Treasury.
Three companies including Mbada Diamonds and Anjin Investments opposed to the consolidation of diamond mining companies and went to court to challenge Government’s decision.
Government did not back down on the process of consolidating the sector in search of better returns.
President clarifies Indigenisation law
In April, President Robert Mugabe clarified the Indigenisation and Economic Empowerment Act, after confusion on whether companies that had not complied with the March 31, 2016 deadline for providing “acceptable plans” should be closed.
President Mugabe said conflicting positions in the interpretation of the policy have caused confusion among Zimbabweans, the business community and potential investors, thereby undermining market confidence.
The major highlight in President Mugabe’s position was that the policy is “sector specific” and is implemented differently.
Government introduced the Indigenisation and Economic Empowerment Act to deliberately empower the historically disadvantaged indigenous Zimbabweans and to grant them ownership and control of the country’s means of production.
This was to enable them to be significant players in the mainstream economy of the country.
However, conflicting positions in the interpretation of the indigenisation regulations have affected foreign investor interest.
SI64 of 2016
Arguably the game-changing piece of legislation introduced by Government last year was SI64.
Government put in place the law to control the importation of goods that are available locally so as to cushion the local industry from the cheap imports.
The regulations were gazetted under Statutory Instrument 64 of 2016 in June last year by the Ministry of Industry and Commerce and was operationalised from July 1.
Bond notes
The Reserve Bank of Zimbabwe released the first batch of bond notes worth US$10 million onto the market on November 28.
The bond notes are pegged at 1:1 against the United States dollar.
A new $1 bond coin was also introduced.
Though the bond notes have improved the liquidity situation in the country, cash queues remain.
The bond notes were mainly introduced to incentivise exporters.
Last week, Reserve Bank of Zimbabwe Governor Dr John Mangudya revealed that about US$29 million worth of the surrogate currency have been put into circulation.
Online Reporter