ZIMBABWE is working on scrapping the Indigenisation Act which restricts foreign shareholding in platinum and diamond ventures to 49% as the country seeks to attract foreign capital, Finance minister Mthuli Ncube has said.
Appearing on Bloomberg on Wednesday, Ncube, who is in Washington to court investors, said the law would be amended soon.
“You can own 100% of any mining investment, any investment in Zimbabwe, that is what is coming through. We are removing that indigenisation rule, which is discouraging foreign direct investment (FDI). Zimbabwe is open for business. It can only be opened for business if you are allowed to own 100% of the investment as an investor,” he said.
The law, which was the centerpiece of former President Robert Mugabe’s campaign in the 2008 election, was amended and limited to platinum and diamonds by President Emmerson Mnangagwa in November 2017.
The southern African nation is home to some of the world’s largest platinum reserves after South Africa and a sizeable amount of diamond deposits, but FDI flows into Harare have remained paltry with investors pointing to the country’s unfriendly local ownership laws.
Industry experts estimate that platinum and diamonds require a capital injection of US$3 billion and US$500 million, respectively. This could increase annual output to 28 tonnes and seven million carats, for platinum and diamond, respectively.
Zimbabwe Miners’ Federation president Henrietta Rushwaya said what Ncube stated in his interview was a welcome development.
“This is a very welcome development. This will increase our FDI since more investors will come to invest in Zimbabwe and our imports will plummet, thereby increasing our GDP (gross domestic product) as a country. This also resonates well with our Zimbabwe is open for business mantra,” she said.