Zimbabwe needs to amend Indigenisation Act - Eric Broch

Zimbabwe needs to amend Indigenisation Act - Eric Broch
Published: 10 January 2012 (2267 Views)
BULAWAYO - Zimbabwe's needs to urgently create a stable investment climate by amending the Indigenisation Act, economist Eric Bloch has said.

In an interview, Bloch told Businessdaily that the country had the potential to achieve the anticipated economic growth, but said policy issues were some of the stumbling blocks militating against the country achieving its full potential.

Bloch said the indigenisation policy, which compels foreign-owned companies operating in the country to transfer 51 percent of their ownership to black Zimbabweans, was impeding investment.

Finance minister Tendai Biti has projected a 9,4 percent economic growth rate this year.

"For the country to achieve real economic growth, we need to have substantial foreign direct investment. Currently, the banks do not have the money to lend the private sector. Most companies in the country are under-capitalised and we need to see money coming into the industry by way of investments," said Bloch.

The economist said the conditions of the indigenisation and empowerment programme were the major obstacles in attracting the much-needed foreign investment.

"Almost every investor and financial institution supports the principle of indigenisation but not the situation where they are going to be reduced to be minority," he said.

"Investors do not want to put their capital, expertise and technology into a company that they have no control over. They end up investing elsewhere where the conditions are favourable," said Bloch.

He said there was need for the law to be substantially modified.

"We must not repeal it but modify it so that it becomes constructive and effective," he said.

Bloch also said economic growth would also depend on how the country is going to conduct the elections.

He reiterated that investors were holding on to their plans until the elections where held.

Although Finance minister Tendai Biti said Zimbabwe’s economy is likely to continue its strong recovery in 2012, from a decade of decline, to grow by 9,4 percent, Bloch predicted that the economy would perform much better particularly in the first six to nine months of the year.

"I actually think for the whole year the economy is going to grow by about 11-12 percent above what that government had focused.

"This because of the improvement in the agriculture, tourism and mining sectors," said Bloch.

"We must anticipate economic growth in the first six to nine months of the year as a result of slight improvement in agriculture subject to a better climatic condition. A small growth will also be expected from the improvement performance in the mining and tourism sector," he said.

"However, that is going to be partially offset by the contraction that is being experienced by the manufacturing sector over the last two years and which is going on.

However, we expect the sector to stabilise particularly in the clothing and manufacturing sector following the new regulation by the ministry of Finance that is set to marginally reduce unfair import competition," he said.

He added that the economic growth would not change the crisis that is bedeviling the country.

"We are working on a small economic base so the growth of economy by 10 percent will be insignificant as it will not be able address the problem of over eight million people who are poverty-stricken.

"The nine or 10 percent growth is also not going to address the unemployment challenge that the country is facing," he said.

- Businessdaily

 0

You May Like These Videos

Comments

There are no comments.

Latest stories

Jonathan Moyo describes Mnangagwa's new dispensation as nonsense

by Stephen Jakes | 22 July 2018 | 22 Views

25 July Set for 'Mthwakazi Parliamentary Indaba and Ordination'

by Stephen Jakes | 22 July 2018 | 21 Views

ROHR granted observer status

by Stephen Jakes | 22 July 2018 | 17 Views

'New dispensation', same old lies

by Ishemunyoro Mupokosera: MDC Alliance Candidate for Mudzi South Constituency | 22 July 2018 | 20 Views

'We don't regret land reform,' says Mnangagwa

by Staff reporter | 22 July 2018 | 20 Views

Hey, women of Zimbabwe, defend one of your own!

by Bishop | 22 July 2018 | 17 Views

Go to court if aggrieved: Sadc

by Staff reporter | 22 July 2018 | 16 Views

Printing of ballot papers almost complete, says ZEC

by Staff reporter | 22 July 2018 | 17 Views

Mnangagwa to officiate at Mugabe airport groundbreaking ceremony

by Staff reporter | 22 July 2018 | 16 Views

'Zanu-PF not worried by small parties'

by Staff reporter | 22 July 2018 | 12 Views

Chamisa trashes Elders, Sadc counsel

by Staff reporter | 22 July 2018 | 22 Views

Batoka project on course

by Staff reporter | 22 July 2018 | 18 Views

Chiwenga to open Gold Centre

by Staff reporter | 22 July 2018 | 16 Views

Zimbabwe - Walvis Dry port commissioning set for August

by Staff reporter | 22 July 2018 | 18 Views

Free range chicken breeder eyes Asian market

by Staff reporter | 22 July 2018 | 18 Views

Moyo talks development

by Staff reporter | 22 July 2018 | 14 Views

Endorsement of Military rule by AU and SADC

by Sinqobile Sibanda | 22 July 2018 | 15 Views

Chamisa to take to the streets

by Staff reporter | 22 July 2018 | 15 Views

MDC-Alliance aspiring councillor in stands scam

by Staff reporter | 22 July 2018 | 10 Views

Kofin Annan crush Chamisa poll demands?

by Staff reporter | 22 July 2018 | 10 Views

Chigumba's sex life and the pitfalls of social media

by Tawanda Majoni | 22 July 2018 | 13 Views

Pokello, the ultimate 'wife material'

by Staff reporter | 22 July 2018 | 11 Views

Who is stealing your vote?

by Knowledge Moyo | 22 July 2018 | 15 Views

fastjet pledges to help revive Bulawayo

by Staff reporter | 22 July 2018 | 11 Views

Chombo off the hook

by Staff reporter | 22 July 2018 | 11 Views

Mujuru to win the Zimbabwe presidential election on July 30

by Staff reporter | 22 July 2018 | 19 Views

What government awaits Zimbabwe next week?

by Zifiso Masiye | 22 July 2018 | 24 Views

Grace Mugabe and hubby hit with $756,401k bill

by Staff reporter | 22 July 2018 | 9 Views

Mnangagwa appeals for racial unity in Zimbabwe

by BBC.com | 22 July 2018 | 9 Views

Healing after the election

by Erick Matotoba | 22 July 2018 | 14 Views

Kofi Annan snubs Mugabe

by Staff reporter | 22 July 2018 | 9 Views

Chamisa says Angola is sending top envoy to Harare

by Staff reporter | 22 July 2018 | 9 Views

'We removed Mugabe, not the Zanu-PF system'

by Staff reporter | 22 July 2018 | 9 Views