Online Reporter
Tapiwanashe Mangwiro
The Government has gazetted new regulations reserving several sectors of the economy for indigenous Zimbabweans, reinforcing the country’s policy on indigenisation and economic empowerment of locals.
This is contained in Statutory Instrument 215 of 2025, titled Indigenisation and Economic Empowerment (Foreign Participation in Reserved Sectors) Regulations, 2025, which was published in the Government Gazette Extraordinary on December 11, 2025.
“They apply to all foreign nationals, not being citizens of Zimbabwe, who wish to participate in a reserved sector of the economy,” setting out strict conditions under which foreign investors may operate, or exit certain lines of business.
The SI defines participation broadly, stating, “In order to participate in a reserved sector of the economy, including to go into partnership with or invest a majority or minority stake in or take over a reserved sector business, or to form or start a new business operating exclusively or predominantly in the reserved sector.”
Zimbabwe’s policy on indigenisation and empowerment aims to correct historical economic imbalances, empower locals and foster national economic participation.
Among countries with policies that reserve economic sectors for local participation or promote local content are Malaysia, South Africa, Nigeria, Brazil, India, China, Russia and Saudi Arabia.
These policies vary widely in their scope and implementation, from mandatory ownership transfer to preferential government procurement.
For instance, Malaysia’s New Economic Policy (NEP) and its successor policies have long-standing affirmative action programmes aimed at restructuring the economy to increase the wealth and participation of the native Malay (Bumiputra) population in various sectors, including education and business ownership.
South Africa has the Black Economic Empowerment (BEE) policies, such as the Employment Equity Act, to promote the advancement of previously disadvantaged racial groups in the workplace and encourage black ownership and control of the economy.
South African procurement policies often prioritise black-owned companies.
In Zimbabwe’s case, the reserved areas include barber shops and beauty salons, bakeries, employment agencies, advertising agencies, artisanal mining, valet services, borehole drilling, pharmaceutical retailing, small-scale grain milling and the marketing and distribution of local arts and crafts.
Passenger transport, real estate agencies and clearing and customs services are also restricted, except for recognised international brands.
Where foreign participation is permitted, the entry bar has been set deliberately high. In retail and wholesale trade, foreign investors must employ at least 200 full-time workers and commit a minimum investment of US$20 million.
In grain milling, the investor must employ at least 50 employees and inject a minimum of US$25 million, while for haulage and logistics businesses, the investor should employ at least 100 employees and invest a minimum of US$10 million. Zimbabwe’s “reserved areas” legislation, primarily governed by the Indigenisation and Economic Empowerment Act, restricts foreign ownership and participation in specific economic sectors to empower local citizens.
Economist Tinevimbo Shava said the regulations reflect a renewed policy effort to protect indigenous enterprises from being crowded out.
“This is a clear attempt by the Government to preserve space for local entrepreneurs, especially in sectors that naturally support small and medium enterprises,” Mr Shava said.
“The emphasis on thresholds shows that foreign capital is being directed towards large-scale, capital-intensive activity rather than everyday commerce.”
The SI also introduces strict rules on beneficial ownership, aimed at curbing the use of fronts. It states that authorities may demand sworn declarations and that any person who “fails or refuses to make the sworn declaration, or makes a false declaration, shall be guilty of an offence and liable to a fine not exceeding level eight or to imprisonment of three to five years.”
Foreign-owned businesses already operating in reserved sectors are not spared, as the SI grants them just 30 days to submit regularisation plans. Thereafter, they are required to divest the majority of their equity to locals.
According to the regulations, “foreign nationals operating in the reserved sector shall, within a period of three years, divest a minimum of seventy-five per centum (75 percent) of their equity to Zimbabwean citizens.”
The divestment must occur in annual tranches, with the SI specifying that it “shall occur in annual tranches of no less than twenty-five per centum (25 percent) per annum,” leaving foreign investors with no more than 25 percent ownership at the end of three years.
Industrialist Dr Nxaba Ndiweni said while the policy direction was understandable, implementation would be key.
“The objective of empowering locals is sound, but execution must be careful,” Dr Ndiweni said.
“If the transition is not managed properly, there is a risk of disrupting supply chains or forcing abrupt exits that hurt employment.”
He added that empowerment should be matched with capacity building.
“Reserving sectors alone is not enough. Local players must have access to finance, skills and markets to ensure these businesses grow and remain competitive.”
The regulations place significant authority in the hands of the Minister of Industry and Commerce, who is empowered to approve, reject or condition applications for participation permits.
The SI states that the Minister “may approve and subsequently issue a permit or an exemption certificate or reject an application” and may revoke permits where investors fail to meet empowerment obligations.
Penalties for non-compliance are severe; operating in a reserved sector without a permit is classified as a criminal offence, with the SI warning that offenders are liable to fines or imprisonment, and repeat offenders may be barred from doing business with Government entities for five years.
As enforcement begins, the new rules mark one of the strongest policy signals yet that Zimbabwe intends to protect local enterprise while directing foreign capital into larger, value-adding investments.
Whether the regulations achieve sustainable empowerment or create new tensions in the investment climate will depend on how consistently and transparently they are applied.
Economist Tinevimbo Shava said the regulations reflect a renewed policy effort to protect indigenous enterprises from being crowded out.
“This is a clear attempt by the Government to preserve space for local entrepreneurs, especially in sectors that naturally support small and medium enterprises,” Mr Shava said. “The emphasis on thresholds shows that foreign capital is being directed towards large-scale, capital-intensive activity rather than everyday commerce.”
The SI also introduces strict rules on beneficial ownership, aimed at curbing the use of fronts. It states that authorities may demand sworn declarations and that any person who “fails or refuses to make the sworn declaration, or makes a false declaration, shall be guilty of an offence and liable to a fine not exceeding level eight or to imprisonment of three to five years.”
Foreign-owned businesses already operating in reserved sectors are not spared, as the SI grants them just 30 days to submit regularisation plans. Thereafter, they are required to divest the majority of their equity to locals.
According to the regulations, “foreign nationals operating in the reserved sector shall, within a period of three years, divest a minimum of seventy-five per centum (75 percent) of their equity to Zimbabwean citizens.”
The divestment must occur in annual tranches, with the SI specifying that it “shall occur in annual tranches of no less than twenty-five per centum (25 percent) per annum,” leaving foreign investors with no more than 25 percent ownership at the end of three years.
Industrialist Dr Nxaba Ndiweni said while the policy direction was understandable, implementation would be key.
“The objective of empowering locals is sound, but execution must be careful,” Dr Ndiweni said. “If the transition is not managed properly, there is a risk of disrupting supply chains or forcing abrupt exits that hurt employment.”
He added that empowerment should be matched with capacity building.
“Reserving sectors alone is not enough. Local players must have access to finance, skills and markets to ensure these businesses grow and remain competitive.”
The regulations place significant authority in the hands of the Minister of Industry and Commerce, who is empowered to approve, reject or condition applications for participation permits.
The SI states that the Minister “may approve and subsequently issue a permit or an exemption certificate or reject an application” and may revoke permits where investors fail to meet empowerment obligations.
Penalties for non-compliance are severe; operating in a reserved sector without a permit is classified as a criminal offence, with the SI warning that offenders are liable to fines or imprisonment, and repeat offenders may be barred from doing business with Government entities for five years.
As enforcement begins, the new rules mark one of the strongest policy signals yet that Zimbabwe intends to protect local enterprise while directing foreign capital into larger, value-adding investments.
Whether the regulations achieve sustainable empowerment or create new tensions in the investment climate will depend on how consistently and transparently they are applied.
