President Emmerson Mnangagwa says his government has amended Zimbabwe’s “indigenisation” economic empowerment laws. Is this correct?
Researched by Njabulo Ncube
Claim: We amended the Indigenization & Economic Empowerment Act, which had constrained foreign ownership of local businesses and discouraged much needed investment. We have now removed this constraint in almost all sectors, sending a clear signal that Zimbabwe is open for business.
Conclusion: Correct
Mnangagwa made the claim in an opinion piece carried by the New York Times of 11 March 2018.
He later tweeted the same, acknowledging himself as the contributor on his verified official twitter account with the handle @edmnangagwa.
Indigenisation refers to the process which encourages the deliberate involvement of indigenous (black) Zimbabweans in the economy, to redress imbalances resulting from discriminatory policies implemented by successive colonial governments.
What are the ways in which a law can be amended in Zimbabwe?
There are several ways of effecting amendments to laws in Zimbabwe under the current constitution.
Firstly, an amendment can be done using the Presidential Powers(Temporary Measures)Act Chapter 10:20 which gives the president the power to amend laws:
“When it appears to the President that-(a) a situation has arisen or is likely to arise which needs to be dealt with urgently in the interests of defence, public safety, public order, public morality, public health, the economic interests of Zimbabwe or the general public interest; and (b) the situation cannot adequately be dealt with in terms of any other law; and(c) because of the urgency, it is inexpedient to await the passage throughParliament of an Act dealing with the situation; then, subject to the Constitution and this Act, the President may make such regulations as he considers will deal with the situation.”
Secondly, it can be done through Parliament in an amendment bill.
According to section 131 of the Constitution, Parliament’s authority is exercised through the enactment of Acts of Parliament.An Act of Parliament is a Bill which has been – (a) presented and passed by both Houses of Parliament; and (b) assented to and signed by the President; in accordance with the Constitution.
Section 132 of the Constitution provides that an Act of Parliament comes into operation at the beginning of the day on which it is published in the Government Gazette or at the beginning of any other day that may be specified in the Act or some other enactment.
Thirdly, an amendment can come via the budget statement, which brings the implementation of changes through the gazetting of Acts of Parliament, Statutory instruments or through administrative measures. As part of the Finance Billbrought to the house by the Minister of Finance, the budget statement is basically a law being passed by parliament.
Which route did the administration take?
The Mnangagwa government, in this instance, has used the third route.
In his 2018 budget announcement on 7 December, 2017, Zimbabwe’s Finance and Economic Planning, Minister Patrick Chinamasa, announced the repealing of among other economic measures, the repealing of Section 3 of the Indigenisation Act, which had a wholesale 51% ownership requirement for all businesses worth US$500 000 and above, “Government is, through the Finance Bill being submitted to this august House for the 2018 financial year, amending the Indigenisation and Empowerment Act, to bring the following into effect from April 2018.”
This was then included in the Finance Bill of 2018. After going through the required 3 readings in the House of Assembly and then passage through the Senate, the Finance Bill was passed into law and amendments effectively took effect when parliament passed the budget on 14 February 2018, with some of the measures having been set to come into effect even earlier, on 1 January 2018.
Some of the amendments
- Diamonds and platinum are the only sub-sectors designated as ‘extractive.’
- Accordingly, the Amendments confine the 51/49 Indigenisation threshold to only the two minerals, namely diamonds and platinum, in the extractive sector.
- The 51/49 threshold will not apply to the rest of the extractive sector, nor will it apply to the other sectors of the economy, which will be open to any investor regardless of nationality.
- The minister may after 1 January 2018, permit a person other than a Zimbabwean citizen to invest in the reserved sector if in his opinion, the person meets certain set out criteria
- The setting up of a National Indigenisation and Economic Empowerment Uni
Conclusion: CORRECT
The Indigenisation and Economic Empowerment Act has been amended through the administrative measures and the Finance Act arising from the 2018 budget announcement.
About the author: Njabulo Ncube is senior Zimbabwean journalist and national co-ordinator of the Zimbabwe National Editors’ Forum (ZINEF).
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