HARARE – Zimbabwe on Wednesday gave foreign businesses until April 1 to comply with controversial equity laws that compel them to cede majority stakes to locals or risk closure.
“The law is the law. The law must be adhered to,” Indigenisation Minister Patrick Zhuwao said at a news conference.
The minister said the cabinet had on Tuesday “unanimously passed a resolution directing from 1 April 2016 all line ministries proceed to issue orders to licencing authorities to cancel licences of non-compliant business.”
Government says the move is aimed at empowering the majority black population who were disadvantaged by colonial rule, but critics say the law has benefitted President Robert Mugabe’s allies.
Zhuwao said some companies had “continued to disregard” the law, prompting the government’s latest decision to order the closure of non-compliant companies.
“The failure to adhere with the laws to the laws of our land must attract immediate consequences that must be severe and dire enough to ensure that the law is respected and adhered to,” he said.
Critics say the law scares away desperately needed foreign investment.
But Zhuwao dismissed those fears.
“We are a market driven economy and when there is a vacuum others will come in,” he said.
“From 1 April 2016 indigenous Zimbabweans will be looking with expectation to see the law that enables them to own their economy begin to be effectively enforced.”
The International Monetary Fund has urged Zimbabwe to review the indigenisation policy to give potential investors confidence.
Major multinational firm operating in Zimbabwe include mining firms, banks and retailers.
This the second deadline government has issued in as many years. A January 2014 deadline attracted little compliance.
Mugabe has in the past threatened to nationalise foreign companies that refuse to comply.
Zimbabwe’s economy has been on a downturn for more than a decade-and-a-half since veteran Mugabe’s government oversaw the often violent eviction of white farmers under controversial land reforms.
Africa News Agency