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Zimbabwe's Elections 2013 - Index of Articles
urges caution on indigenisation
August 19, 2013
The Confederation of
Zimbabwe Industries (CZI) has advised the soon-to-be formed government
to put on hold a blanket approach on the indigenisation and empowerment
regulations, adding that the policy required more clarity to stimulate
In its submissions made
during a meeting convened by the Office of the President (OPC) on
August 2, CZI said in the short-term, there would be need to craft
an economic policy which seeks to attract more capital as the country’s
main economic sectors remain in doldrums due to underfunding.
CZI said the new government
should adopt proposals made by different sectors in 2010 to ensure
that the empowerment policy catapults economic growth, which has
slowed down in recent times.
The meeting was chaired
by an official from the Office of the President and Cabinet and
was attended by CZI, other business organisation which include the
Bankers’ Association of Zimbabwe, Zimbabwe National Chamber
of Commerce, Chamber of Mines of Zimbabwe.
becomes the first following Zanu-PF’s
landslide victory in the just-ended general elections.
The party won a two-thirds
majority in Parliament and may soon form the next government should
the Constitutional Court dismiss a challenge on the outcome by outgoing
Prime Minister Morgan Tsvangirai.
CZI said the new government
should also manage political risk linked to the outcome of the poll
“(There is need
for) better articulation of the indigenisation and economic policies
taking into account recommendations of sectoral committes,”
the CZI said.
exceptions to the 51% rule for sectors requiring imported technology
and capital not available in the country need to be highlighted.
Unequivocal statement that the multicurrency system will be maintained
for at least the full term of the government.”
The indigenisation law
compels foreign-owned companies to sell 51% to locals.
Analysts say Zimbabwe
has since 2009 attracted low foreign direct inflows due to lack
of clarity on the empowerment policy as well as hassles in setting
up a business.
FDI rose to $400 million
in 2012 from $65 million in 2009. In the medium-term, CZI said the
government should engage in discussions and engage on the reintroduction
of the local currency.
Reserve Bank of Zimbabwe
has already allayed fears of an immediate comeback of the local
currency which became worthless in 2008.
The government was also
urged to restore confidence in financial markets that encourages
savings by individuals and the informal sector and mobilising cheaper
foreign lines of credit.
CZI urged the government
to resolve infrastructure constraints and facilitate private sector
investment in infrastructure as well as mobilising long-term capital
for expansion projects.
Turning to the country’s
external debt, currently hovering around $10,7 billion, CZI said
the new government should fully engage creditors to ensure that
the country’s creditworthiness improves.
according to Finance minister Tendai Biti, requires a $4 billion
stimulus package to quicken economic growth. Biti has already revised
year end economic growth rate to 3,4% from the initially projected
5% to underperformance of key economic sectors.
The manufacturing sector
has been struggling to grow since 2009 due to liquidity challenges,
antiquated equipment and failure to compete with other products
from the region.
Most companies in the
sector have closed down and many people have been rendered jobless.
The majority of the companies
in the sector are operating at less than half of their capacity
as they fail to attract more working capital both locally and internationally.
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