- October 14, 2020
- Posted in NEWS
Zimplats board chairperson Dr Fholisani Sydney Mufamadi has said his company will engage the government with regards to the Indigenisation and Economic Empowerment Act at the same time support the government in its endeavours to empower indigenous Zimbabweans and to develop the economy.
Rudairo Dickson Mapuranga
Last year the Minister of Finance and Economic Development in his Mid-Term and Supplementary Budget presented to Parliament on 1 August 2019, stated that the Indigenisation and Economic Empowerment Act (Chapter 14:33) requiring 51% indigenous equity for diamonds and platinum miners was going to be repealed and be replaced with an Economic Empowerment Act consistent with the Government’s drive to open Zimbabwe for business.
This announcement came as a welcome to the business community who had previously critic the law of pushing out Foreign Direct Investment (FDI).
Zimplats Chairperson Mufamadi said Zimplats supports the government of Zimbabwe in its quest to empower the people of Zimbabwe and to develop the economy, however, his company will continue to engage the government for clarity regarding the law.
“Your Company continues to support the Government of Zimbabwe in its endeavours to empower indigenous Zimbabweans and to develop the Zimbabwean economy. The Government is yet to amend the law to bring this to effect. Zimplats will continue to engage the Government for clarity on this matter.” Mufumadi said.
Mufamadi said as a way to support in the Zimbabwean community in the development and economic growth the company procured 60 per cent of its goods and services worth USD220 million from local suppliers.
“Your Company continued with its drive to positively contribute towards the economic development of Zimbabwe and the country’s fiscus. In pursuit of this objective, the Group’s operating subsidiary procured 60% of its goods and services from local suppliers during the year, equivalent to US$220.7 million (FY2019: US$234 million). The decrease in payments to local suppliers was attributable to the decrease in capital expenditure from US$115 million in FY2019 to US$104.2 million and high imports demand strategic projects.” He said.
In addition, the company continues to grow its support of local enterprises which has resulted in over 2 000 jobs created in the last seven years.
Payments to Government in respect of corporate tax, withholding tax, royalties, payroll taxes, and customs duties for the year amounted to US$164 million compared to US$84 million in the prior year.
Zimbabwe is not the first country to have such a policy. A host of other countries from the developed world implemented such policies and still have them in various forms which might not be as direct as the compulsory 51/49 shareholding adopted by Zimbabwe. These countries include the US, China, France, Italy, Brazil, Singapore, South Korea, Japan, Italy, Taiwan and South Africa. In these countries, certain economic sectors are reserved for the natives or the national government pushes for joint ventures with foreigners on strategic investment portfolios.