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Lloyd Gumbo Senior Reporter
Government will not rush to enforce the Indigenisation and Economic Empowerment Act on foreign-owned firms that are reluctant to comply with the law, Parliamentarians heard yesterday.
Youth, Indigenisation and Economic Empowerment Deputy Minister Mathias Tongofa said his ministry would not rush to apply heavy-handed action on non-compliant companies.
He made the remarks when he appeared before the parliamentary portfolio committee on Youth, Indigenisation and Economic Empowerment chaired by Zanu-PF MP for Gokwe-Nembudziya, Cde Justice Mayor Wadyajena.
Legislators had raised concern that the ministry was failing to enforce the law by allowing foreign-owned companies to hold the country at ransom.
“There are provisions within the law to punish these companies,” said Deputy Minister Tongofa. “However, the ministry does not do it in isolation. According to the law, we should work together with the licensing authorities to either deny renewal of licence or revoke the licence.
“As you all know, most people say this law is fighting against economic development in terms of foreign direct investment and closing of companies. So, we try to balance between the closures of the companies and viability of the companies as well.”
Cde Wadyajena asked if the ministry was up to the task considering that it was now sacrificing the law to satisfy foreign interests.
Marondera East MP, Cde Jeremiah Chiwetu (Zanu-PF) asked if reluctant foreign firms were given deadlines.
Zanu-PF MP for Goromonzi West Cde Beatrice Nyamupinga said it was clear that the ministry was held to ransom by foreign firms.
They suggested that it was important for the ministry to enforce the law so that indigenous Zimbabweans could benefit.
But Deputy Minister Tongofa responded: “We are sandwiched because the economy wants to be viable and for the ministry to be said to be the one that is forcing companies to close, it’s something we don’t agree with.
“So, we didn’t do that (enforcing the law) for the purposes of negotiating with those companies to find out why they are doing so? But we are not saying we are not going to force the companies to comply because they have workers and are contributing to the economy,” he said..
“We are saying we don’t want to use that hard way of doing business because they will close (down) and if they close what will happen? We are looking at the repercussions, so we are talking to the companies. Some of the companies that were difficult are coming on board, so we hope those companies will come on board. We will highlight to them what the law can do to them if they don’t comply.”
Deputy Minister Tongofa said at least $38 million had been deposited in Community Share Ownership Trusts .
With $14 million having been spent already.
He said the major challenge in the indigenisation exercise was capitalisation since the majority of indigenous Zimbabweans did not have money to buy shares from indigenising companies.
National Indigenisation and Economic Empowerment Board chief executive, Mr Wilson Gwatiringa said a number of companies had achieved the 51-49 percent shareholding among them Metallon Gold and Blanket Mine.
He said at least 1 200 companies including small enterprises had their indigenisation plans approved by the ministry.
Online Reporter