Zimbabwe gives foreigners December ultimatum to close businesses

Zimbabwean President Robert Mugabe inspects a vendor’s stand on the sidelines of a business forum on small and medium enterprises (SMEs) held at a hotel in Harare, capital of Zimbabwe. Zimbabwe has given foreigners up to the end of December to close their businesses in sectors reserved for locals or risk arrest.PHOTO | XINHUA | FILE  XINHUA

Friday, November 22, 2013

By Kitsepile Nyathi

Zimbabwe has given foreigners up to the end of December to close their businesses in sectors reserved for locals or risk arrest.

According to the country’s indigenisation laws, foreigners are not allowed to operate retail and wholesale businesses, barbershops, hairdressings, beauty salons, employment agencies and grain milling.

The Indigenisation and Economic Empowerment Act also reserves agriculture (primary production of food and cash crops), transportation, estate agencies, tobacco grading and packaging, tobacco processing, advertising agencies, milk processing and provision of local arts and crafts, marketing and distribution to locals.

Mr George Magosvongwe, the secretary in the ministry of Youth, Indigenisation and Economic Empowerment told a parliamentary committee on Thursday that foreigners who defied the law would be arrested.

RESERVED SECTORS

“I confirm that some non-indigenous entities are still operating in the reserved sectors and there is a deadline for January 1 for them to comply with the requirement to relinquish their holdings in that sector,” he said.

“You will realise that January 1 is a month to come and we are putting in place measures for enforcement in the event that they do not comply.”

Mr Masgosvongwe said the government would identify indigenous Zimbabweans that would take over the businesses from foreigners to avoid shortages in the economy.

“There is need to ensure that we don’t create shortages in the economy, but certainly the ministry is going to enforce the reserved sectors rule,” he said.

“We will bring in the enforcement agencies from right across the government departments and local authorities to ensure that enforcement happens.”

The move will mainly affect Nigerians and Chinese who have flooded Zimbabwe since the country’s economy started collapsing in the late 1990s.

After his controversial reelection in July, President Robert Mugabe vowed to intensify the implementation of the indigenisation law that seeks to compel foreign companies to transfer 51 percent of their shareholding to locals.

However, the law has caused uncertainty in the economy at a time the country is desperately seeking foreign investment.