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The role of the Ministry of Youth, Indigenisation and Economic Empowerment has been thrown into disarray following Government’s decision to allow line ministries to approve compliance applications.
The new regulations, which came in place after Finance Minister Mr Patrick Chinamasa promulgated the Finance Bill last year, have effectively eliminated the indigenisation portfolio from the Indigenisation Ministry headed by Mr Christopher Mushohwe.
Fears are that a delay in clarification of the role Ministry of Youth, Indigenisation and Economic Empowerment could create uncertainty among investors.
In an interview last week, Minister Mushohwe told The Sunday Mail Business he was still in the dark.
“I have not been officially told but have read about it; since I am also new and we have just had one Cabinet meeting, it would be wise to ask the Minister of Finance,” he said.
Government contends that line ministries have the ability to deal with any hygiene issues on indigenisation and empowerment in their respective sectors.
Under the new dispensation, the Indigenisation and Economic Empowerment Ministry will only issue compliance certificates on the recommendation of line ministries after their own assessments.
While the 51-49 percent ownership structure would still apply across all sectors, it would be on the basis of the assessment by the responsible line ministry that the compliance certificate in respect of the investment proposal would be issued.
Previously, the Indigenisation Ministry had sole responsibility of approving compliance on all investment proposals.
Analysts say line ministries are better positioned to understand the dynamics and challenges bedevilling their respective sectors and, therefore, capable of assessing the compliance framework.
New projects will now be first processed through the Zimbabwe Investment Authority, which in turn forwards them to the relevant line ministry to make an assessment concerning compliance with indigenisation and empowerment regulations.
Similarly, line ministries will assess existing, or brown field, investments but without need to go through the investment authority.
Minister Chinamasa has said given the need to continue improving Zimbabwe’s investment climate in light of the need for both domestic and foreign investment, the 2015 National Budget sought to provide further clarity on the indigenisation and empowerment framework.
“This will be in order to ensure consistency and predictability in Government’s engagement with stakeholders and investors.”
Online Reporter
Bongani Ndlovu