The statement says “local content refers to the value retained in Zimbabwe in the form of wages, salaries, taxation, community ownership schemes, and other activities such as procurement and linkage programmes”.
It remains unclear whether “gross value of exploited resources” will apply to a mine’s revenues or profits.
At Zimplats, the country’s largest miner and the target of much of Zhuwao’s empowerment rhetoric, local spend as a percentage of its revenue is around 51 percent, according to data from its 2015 annual report. The company’s local spend, as a percentage of all expenditure, is 71 percent.
Foreign banks will be allowed to retain majority shareholding in their local units, Mugabe said, although they would be expected to increase funding to “key economic sectors and projects”.
“The banking sector shall continue to be under the auspices of the Banking Act, which is regulated by the Reserve bank of Zimbabwe, and the insurance sector under the auspices of the Provident and Insurance Act,” Mugabe’s statement read.
“This policy position is essential for the promotion of financial sector stability, confidence and financial inclusion. These institutions will, nonetheless, be expected to make their contributions by way of financing facilities for key economic sectors and projects, employee share ownership schemes, linkage programmes and such other financial empowerment facilities as may be introduced by the Reserve Bank of Zimbabwe, from time to time.”
This stance on banks sharply contradicts that of Zhuwao, who had demanded that foreign banks cede control of their units, a position that led to a public fallout with Finance Minister Patrick Chinamasa and central bank governor John Mangudya. Zhuwao had called Chimamasa a “liar” after the Finance Minister released a statement saying banks were compliant with the law.
Mugabe, in his statement, admits that the “conflicting positions” among his ministers were hurting the economy.
“This has caused confusion among Zimbabweans, the business community, current and potential investors, thereby undermining market confidence. It is therefore fit and proper that I provide clarification on this very vital national policy, for the guidance of Government Ministries, the business community and current and would-be foreign investors,” Mugabe said.
Significantly, Mugabe said he was now prepared to amend the law, a centerpiece of his reelection campaign in 2013.
“To the extent that the Indigenisation and Economic Empowerment Act may not sufficiently conform with this policy position, I have directed that the law be amended or changed forthwith accordingly,” he said.- The Source