Zimbabwe warns foreigners to hand their businesses over in 30 days or face jail
Foreign business owners in Zimbabwe have been told they must hand control of their companies over to indigenous Zimbabweans by 1 January 2014 or they will be arrested.
The owners of foreign firms operating in certain sectors in Zimbabwe after 1 January 2014 will face arrest, according to the Secretary for Youth, Indigenisation and Economic Empowerment in the country, George Magosvongwe.
The Indigenisation and Economic Empowerment Act, passed in 2007, demands that certain types of foreign businesses concede 51% control to black Zimbabweans.
Indigenisation of the economy was one of President Robert Mugabe’s key campaign pledges in the run-up to his re-election in August.
The law states that some specific sectors of the economy are reserved for local business owners. Areas classified as such include: retail and wholesale businesses, hairdressers, beauty salons, bakers, employment agencies, agriculture, transportation, estate agencies, tobacco processing, advertising agencies, marketing and distribution.
Since May it has been compulsory for all locally and foreign-owned firms in these sectors to apply for indigenisation compliance certificates, but only locals have been awarded them.
Officials have warned that the law will now be enforced more strictly- resulting in those who defy it by continuing to run their businesses without a license after the deadline facing prosecution.
Those found operating illegally risk being fined or imprisoned.
“I confirm that some non-indigenous entities are still operating in the reserved sectors and there is a deadline for January 1for them to comply with the requirement to relinquish their holdings in that sector,” George Magosvongwe told a parliamentary meeting, reports the state-owned Herald newspaper.
He went on to add: “1 January is a month to come and we are putting in place measures for enforcement in the event that they do not comply.”
Magosvongwe said that the government is currently in the process of identifying Zimbabweans to take over businesses in affected sectors in order to prevent shortages of goods.
According to the Herald, the policy is designed to clamp down on Nigerian and Chinese companies which have been operating in local markets since the collapse of the Zimbabwean manufacturing industry in particular.
These retailers have flooded the country, setting up shops which offer a variety of goods at low prices- undercutting local traders in the process.
