By Brian Latham, Nasreen Seria and Antony Sguazzin
Zimbabwe’s government will publish industry-specific limits on ownership in its black empowerment laws within months, with foreign-owned mining companies required to cede at least 51 percent of assets, Finance Minister Patrick Chinamasa said.
“Mining will be treated differently because the mineral is ours, it belongs to the state,” Chinamasa, 67, said in an interview in Johannesburg today.
Zimbabwe is struggling to attract investment in a nation that holds the world’s second-largest chrome and platinum reserves, partly due to policy uncertainty related to its so-called indigenization laws. The International Monetary Fund said earlier this month that Zimbabwe must provide more clarity on the rules to investors and relax labor laws in order to restore confidence in the economy.
“Any investor who comes to exploit our natural resources will be treated differently than for example an investor that’s coming into banking or an investor coming into manufacturing, who is coming with his capital, with his equipment,” Chinamasa said.
Anglo American Platinum Ltd. (AMS), Impala Platinum Holdings Ltd. (IMP) and Rio Tinto Plc are among companies mining in the country.
Chinamasa is forecasting economic growth of 3.1 percent this year and 3.2 percent in 2015. The economy has struggled to gain traction more than a year after President Robert Mugabe, 90, was re-elected to office.
“We have done a lot of work which we need to finalize to clarify” the indigenization laws. “It’s to clarify that it’s not a one-size-fits-all. There will be a sector by sector approach.”
The indigenization law requires foreign and white-owned companies with assets of more than $500,000 to cede or sell a 51 percent stake to black nationals or the country’s National Economic Empowerment Board.
Chinamasa said the government is unable to curb the wage bill, which is estimated at about 76 percent of state expenditure. While it should ideally be about 40 percent to 50 percent, most of the wages are paid to teachers and health workers, which are necessary jobs, he said.
“It’s not an easy problem to address,” he said. “I’ve already made a commitment that we should not reduce our contribution to education. The only way to address this is to stimulate the economy to grow so that wage bill can find its proper proportion within a bigger cake.”
To contact the editors responsible for this story: Nasreen Seria at [email protected] John Viljoen