Zimbabwe Indigenisation Policy
April 22, 2012
Zimbabwe’s Indigenisation Policy Africa possesses vast mineral resources, from diamonds to platinum, which remain untapped. Recently discovered ore deposits and soaring commodity prices are attracting miners from around the world to Africa. This has led to “resource nationalism”, as African countries are looking for ways to maximize their share of the profits from the mining. All over Africa countries are increasing taxes and royalties on mining companies in an effort to maximize those profits but none go as far as Zimbabwe, which is employing an “Indigenisation Policy” that requires foreign companies to be 51% owned by indigenous Zimbabweans within five years.
Indigenisation policies have existed in Zimbabwe since it won its independence in 1980, although the Indigenisation and Economic Empowerment Act, introduced in February 2010, is the first Act to include the word “indigenisation” in its name. The government claimed that it is a way to empower the indigenous population for a “truly independent Zimbabwe, whose resources and economy will be controlled by the Zimbabweans” (Ministry of Youth Development Indigenisation & Empowerment). The Ministry also claims that giving ownership to the indigenous population will reverse the dependency on foreign aid and allow the locals to participate as not just labourers but also as shareholders. The result, according to the Ministry, will be sustainable growth as opposed to the unsustainable growth that results from relying on foreign aid without meaningful involvement from the local population. The Ministry also cites that owning majority shares in a company will allow it to exert control over what the company can or cannot do, but the laws and regulations of the country should already serve these purposes. However, this is not the first case of the Zimbabwe government attempting to transfer ownership of assets from foreigners to indigenous Zimbabweans. In 1995, President Mugabe introduced a land reform
Zimbabwe’s Indigenisation Policy Africa possesses vast mineral resources, from diamonds to platinum, which remain untapped. Recently discovered ore deposits and soaring commodity prices are attracting miners from around the world to Africa. This has led to “resource nationalism”, as African countries are looking for ways to maximize their share of the profits from the mining. All over Africa countries are increasing taxes and royalties on mining companies in an effort to maximize those profits but none go as far as Zimbabwe, which is employing an “Indigenisation Policy” that requires foreign companies to be 51% owned by indigenous Zimbabweans within five years.
Indigenisation policies have existed in Zimbabwe since it won its independence in 1980, although the Indigenisation and Economic Empowerment Act, introduced in February 2010, is the first Act to include the word “indigenisation” in its name. The government claimed that it is a way to empower the indigenous population for a “truly independent Zimbabwe, whose resources and economy will be controlled by the Zimbabweans” (Ministry of Youth Development Indigenisation & Empowerment). The Ministry also claims that giving ownership to the indigenous population will reverse the dependency on foreign aid and allow the locals to participate as not just labourers but also as shareholders. The result, according to the Ministry, will be sustainable growth as opposed to the unsustainable growth that results from relying on foreign aid without meaningful involvement from the local population. The Ministry also cites that owning majority shares in a company will allow it to exert control over what the company can or cannot do, but the laws and regulations of the country should already serve these purposes. However, this is not the first case of the Zimbabwe government attempting to transfer ownership of assets from foreigners to indigenous Zimbabweans. In 1995, President Mugabe introduced a land reform