Zimbabwe Says Foreigners Can Now Buy 49% Stake In Local Firms

Zimbabwe will now allow foreign investors to buy stakes of up to 49% in companies listed on its stock exchange from 40% previously, the Central Bank Governor said on Thursday.

The measures are meant to boost investment in the Southern African nation’s economy which is suffering from low growth and a devastating drought, John Mangudya said in a monetary speech at the central bank.

Struggling to attract foreign investment, the economy was growing at a sluggish rate, worsened by low industrial capacity and tax revenues as well as a liquidity crunch and suppressed demand that is feeding deflation, Mangudya said.

“We have also increased the threshold of foreign investors on the stock exchange from 40% to 49% in line with the indigenisation and economic empowerment policy,” he said.

The central bank chief said Zimbabwean companies and individuals had illegally transferred $1.884 billion in 2015, blaming this on lax foreign exchange controls since the country abandoned its currency in 2009 in favour of foreign currencies.

The money was being transferred through non remittance of export earnings, unapproved foreign investments, tax evasion and smuggling, the central bank governor said.

“This country needs to plug the leakages of foreign exchange for the economy to undergo durable and robust transformation,” Mangudya said.

The World Bank said on Wednesday Zimbabwe’s economy will grow by 1.5% in 2016 and consumer prices will remain deflationary due to global and local constraints on its recovery.