Zimbabwe has given foreigners operating in the retail sector until Jan. 1 2014 to cease operations as the sector is reserved for black Zimbabweans according to the country's indigenization law.

Permanent secretary in the Ministry of Youth, Indigenization and Economic Empowerment George Magosvongwe told a parliamentary committee on Thursday that the law will be fully enforced, and urged local businesses to fill the gap to avoid shortages in the economy.

"As we proceed with removing foreigners in the sector, we need to put in place a mechanism that prevents shortages in the reserved sectors," Magosvongwe said. "So we have been liaising with our business groups and asking them to be ready to replace the foreigners."

Local empowerment groups have been critical of government's failure to remove foreigners in the retail sector, with some accusing the foreigners of bribing locals to front them.

According to the law, other sectors reserved for locals include primary production of food and cash crops, transportation business involving passenger buses, taxes and car hire services, hair dressing and beauty salons, employment agencies, estate agencies, valet services, grain milling, tobacco grading and packaging, tobacco processing, advertizing agencies, milk processing and marketing of local art and craft.

On another note, Magosvongwe said foreign-owned banks including Britain's Barclays and Standard Chartered Banks would be indigenized.

He however said the government would not insist on the 51/49 percent share ownership structure being fulfilled at once. According to the law, foreign businesses need to cede 51 percent of the share-holding of their operations in Zimbabwe to locals.

The law, driven by the ruling Zanu-PF party, has been causing controversies since its inception with critics saying the policy will scare away foreign capital which the impoverished nation badly needs. However, there have been signs that the new government, set up after longtime president Robert Mugabe's re- election in July, will take a softer approach to implement the law.

"It's a service sector and we are not proceeding on the basis of a 'one size fits all'. But as a basic line-up, our resource (money) deposited by our own people entails the need for their participation in foreign banks," Magosvongwe said. Endi

Go to Forum >>0 Comment(s)