Back to Index

Indigenisation and Economic Empowerment Bill, Amended, 2007 (H.B. 6A, 2007)
September 25, 2007

View the text of the original Bill

Download this document
- Word 97 (170KB)
- Acrobat PDF version (231KB)
If you do not have the free Acrobat reader on your computer, download it from the Adobe website by clicking here.

This document reflects the two amendments made to the Bill during the Committee Stage in the House of Assembly. Both amendments were proposed by the Minister. There were no further amendments to the Bill when it went before the Senate.

The provisions affected are clauses 4 and 7. In the text we have indicated the changes by rendering deleted text in strikethrough font and new text in bold, underlined font.

Clause 4: Deletion of subsection (3) and substitution of new subsection. The new subsection omits the original provision for the Minister, when indicating disapproval of a proposed transaction, to "introduce to the notifying party any additional or alternative party to the transaction in order for the transaction to comply with the objectives specified section 3(1)(b), (c), (d) or (e), as the case may be".

This amendment appears to have been prompted by the view of the Parliamentary Portfolio Committees, in their report on the Bill, that "the power to provide additional parties should only be prompted by invitation" (House of Assembly Debates, 25th September, 2007, column 738).

Clause 7: A rewording of clause 7(2)(g). Grammatical corrections only.

MEMORANDUM

This Bill seeks to create an enabling environment that will result in increased participation of indigenous people in Zimbabwe in the economic activities of the country. In order to ensure meaningful participation, the Bill also makes provision for the establishment of an Indigenisation and Empowerment Fund to provide finance for the indigenous people in the acquisition of shares, working capital and other forms of finance. Ultimately it is intended by this Bill to provide an enabling environment in which at least a 51% shareholding in the majority of businesses in all sectors of the economy is in the hands of indigenous people.

In more detail the individual clauses of the Bill are as follows—

PART I
Clause 1 sets out the Bill’s short title and date of commencement.

Clause 2 defines the terms used throughout the Bill.

PART II
Clause 3 outlines the objectives and measures that the Government will put in place in order to ensure that its goals and policies in pursuance of indigenisation will be met. The clause sets out mandatory indigenous shareholding thresholds of 51% in every business that is being transferred, merged, restructured, unbundled or demerged and in any new investments of a prescribed value. Such transactions must be referred to the Minister for approval, and any transaction that fails to meet the required minimum shareholding percentage will not be approved. The Minister will however exercise his or her discretion and prescribe a lesser percentage depending on the circumstances of each case subject to a set the time-frame within which the 51% share or controlling interest must eventually be attained.

Clause 4 gives the Minister power to review and approve indigenisation arrangements. This clause requires the Minister to be notified in writing of any business transaction to which the provisions of this Bill apply and the Minister will approve or disapprove of the transaction. The Minister will disapprove the transaction if it does not comply with the objectives set out in clause 3.

Clause 5 authorises the Minister to order the licensing authority of any business that fails to notify the Minister of a transaction affecting its ownership to cancel the licence, registration or other authority under which that business operates at the time it comes up for renewal or, if it was issued indefinitely, within a period of six months from date of the order. The Minister will give the business concerned sufficient time to rectify its failure, after which he or she may have the licence terminated, subject to a right of appeal under Clause 20.

Clause 6 makes provision for the Minister to assist, upon request by the business concerned, in identifying potential indigenous persons who will acquire a controlling interest in the business if the business is unable to identify suitable persons to partner with as is required in the Bill.

PART III
This Part provides for the establishment and appointment of members of the National Indigenisation and Economic Empowerment Board.

Clause 7 enumerates members of the Board who will be appointed by the Minister in consultation with the President. The Board will consist of not less than eleven and not more than fifteen members who will be drawn from various sectors and represent various interest groups. The Secretary for the Ministry of Indigenisation and Empowerment will also be a member of the Board.

Clause 8 spells out the functions of the Board, which include advising the Minister on appropriate measures to adopt in the implementation of the objectives and policies on indigenisation. The administration of the Indigenisation Fund is also vested in the Board.

The Chief Executive Officer of the Board will be appointed in terms of Clause 9. The other staff of the Board will also be appointed under this Clause. The functions and terms of appointment of the Chief Executive Officer and his or her staff are further provided for in this clause.

The Board is expected to prepare and submit annual reports on matters the Board will have dealt with in the previous year. The Minister may require the Board to submit any other report as the Minister may deem necessary. The Minister must lay the annual report submitted to him or her before Parliament.

In Clause 11 the Minister is authorised to give the Board general directions relating to the government’s policy on indigenisation and economic empowerment.

PART IV
This Part establishes the Indigenisation and Economic Empowerment Fund. The objectives of the Fund which are outlined in Clause 12 are to provide financial assistance to indigenous people so that they are able to participate meaningfully in various economic endeavours.

The current National Investment Trust of Zimbabwe will be constituted as a special account of the National Indigenisation and Economic Empowerment Fund in terms of Clause 13. The reconstitution will not however affect the interests of the unit holder, and the Deed of Trust is incorporated in this Act in the Second Schedule with minor amendments which are purely consequential and meant to bring the Deed in line with this Clause. Any other amendments to the Schedule will be done by the Minister in consultation with the Board and by notice through a Statutory Instrument.

Clause 14 provides for the composition of the Fund. The fund will consist of moneys appropriated by Act of Parliament, levies, approved donations, loans and other financial assistance and any moneys that may vest in or accrue to the Fund.

The Board administers the Fund through its Chief Executive Officer in terms of Clause 15. The Board may open banking accounts into which the moneys of the Fund will be paid. The Third Schedule provides detailed provisions governing the administration of the Fund.

Clause 16 provides for the National Indigenisation and Economic Empowerment Charter. Beneficiaries of the Fund are expected to conform to the standards of good and ethical business conduct that are set out in the Charter. Detailed provisions of the Charter are contained in the Fourth Schedule.

PART V
This Part makes provision in Clause 17 for the imposition of levies on any private or public company and any other business in Zimbabwe. The minister will by statutory instrument specify the companies and businesses on whom the levy will be imposed. The draft statutory instrument is laid by the Minister before Parliament and approved by resolution of Parliament before it is put into force. All levies collected must be remitted to the Fund.

Clause 18 penalises any person who without lawful excuse fails, neglects or refuses to pay, collect or remit any levy. The maximum level of fine payable is level six or imprisonment not exceeding one year. The court convicting the person will also order the person to pay, remit or collect the levy due in addition to any penalty that it may impose.

PART VI
This Part provides for general and transitional provisions. Generally, the Minister may request information regarding the shareholdings or similar interests of the members of any company or business. Failure to provide the information requested attracts criminal penalties not exceeding a fine of level five.

C lause 20 gives any person aggrieved by a decision of the Minister a right of appeal to the Administrative Court. However, the person is obliged to comply with the Minister’s order or directive pending finalisation of the appeal.

Clause 21 provides for the regulatory powers of the Minister. The maximum level of fine payable for any offences under the regulations is level twelve and alternatively a term of imprisonment not exceeding five years or both.
The assets, rights obligations and liabilities of the National Investment Trust of Zimbabwe will be transferred to the Unit Trust Account of the Indigenisation and Economic Empowerment Fund once this Act comes into effect in terms of Clause 22. Nothing changes in terms of rights held by unit holders or investors in the National Investment Trust of Zimbabwe except that the account will be one of the many accounts of the Fund which will be used as vehicles to support indigenisation and economic empowerment funding.

Clause 23 provides for the transfer, with their consent, of every person employed by the National Investment Trust to the service of the Board. The employees will continue to enjoy the same conditions of service until such time that the Board has drawn up new conditions of service, which must not be less favourable than the conditions before transfer.

ARRANGEMENT OF SECTIONS

PART I
PRELIMINARY

1. Short title and date of commencement.
2. Interpretation.

PART II
INDIGENISATION AND ECONOMIC EMPOWERMENT:
GENERAL OBJECTIVES AND MEASURES

3. Objectives and measures in pursuance of indigenisation and economic empowerment.
4. Power of Minister to review and approve indigenisation and empowerment arrangements.
5. Enforcement of notification requirement.
6. Referral to the Minister of proposed notifiable transactions in respect of which no counterparties have yet been identified.

PART III
ESTABLISHMENT AND FUNCTIONS OF THE NATIONAL INDIGENISATION
AND ECONOMIC EMPOWERMENT BOARD

7. Establishment and appointment of the National Indigenisation and Economic Empowerment Board.
8. Functions of Board.
9. Chief executive officer and staff of Board.
10. Reports of Board.
11. Minister may give Board directions in national interest.

PART IV
NATIONAL INDIGENISATION AND ECONOMIC EMPOWERMENT FUND

12. Establishment and objects of National Indigenisation and Economic Empowerment Fund.
13. Unit Trust Account of National Indigenisation and Economic Empowerment Fund.
14. Composition of Fund.
15. Administration of Fund.
16. National Indigenisation and Economic Empowerment Charter.

PART V
LEVIES

17. Imposition of levies.
18. Failure to pay, collect or remit levies.

PART VI
GENERAL AND TRANSITIONAL

19. Minister may request information
20. Appeals.
21. Regulations.
22. Transfer of assets, obligations, etc. of National Investment Trust to Fund.
23. Transfer of employees of National Investment Trust to Board and conditions of service of transferred employees

FIRST SCHEDULE: Provisions applicable to the Board and committees.
SECOND SCHEDULE: Rules of the Unit Trust Account of the Fund.
THIRD SCHEDULE: Provisions Applicable to the Administration of the Fund
FOURTH SCHEDULE: National Indigenisation and Economic Empowerment Charter

BILL

To provide for support measures for the further indigenisation of the economy; to provide for support measures for the economic empowerment of indigenous Zimbabweans; to provide for the establishment of the National Indigenisation and Economic Empowerment Board and its functions and management; to provide for the establishment of the National Indigenisation and Economic Empowerment Fund; to provide for the National Indigenisation and Empowerment Charter; and to provide for matters connected with or incidental to the foregoing.

ENACTED by the President and the Parliament of Zimbabwe.

PART I

PRELIMINARY

1 Short title and date of commencement
(1) This Act may be cited as the Indigenisation and Economic Empowerment Act [Chapter ].
(2) This Act shall come into operation on a date to be fixed by the President by statutory instrument.

Download full document 

Please credit www.kubatana.net if you make use of material from this website. This work is licensed under a Creative Commons License unless stated otherwise.

TOP