Chinamasa Unveils $5,1 Billion Budget, Proposes Revision of Feared Indigenization Law

This post was originally published here

Zimbabwe’s Finance Minister Patrick Chinamasa on Thursday presented a $5,1 billion national budget in parliament proposing to scrap some provisions of the country’s feared indigenization law in an effort to promote foreign direct investment.

The minister, who was reappointed by President Emmerson Mnangagwa to the finance portfolio after he was sacked by former president Robert Mugabe, said the government is also expected to sack at least 3,700 Zanu PF youth working for the government.

In his budget statement for the 2018 fiscal year, Chinamasa told parliament that government has introduced the Finance Bill designed to amend the Indigenisation and Empowerment Act.

He said the move is meant to reboot the nation’s comatose economy.

The regulations being crafted and set to be introduced in April 2018, are expected to still restrict ownership thresholds in the mining of diamonds and platinum.

“Accordingly, the proposed amendments will confine the 51/49 indigenisation threshold to only the two minerals, namely diamonds and platinum, in the extractive sector. The 51/49 threshold will not apply to the rest of the extractive sector, nor will it apply to the other sectors of the economy, which will be open to any investor regardless of nationality.”

Many foreign investors have over the years expressed concern over the indigenization law, saying it did not protect their investments in Zimbabwe.

At the same time, Chinamasa said the government will get rid of unqualified youth working in the government who are affiliated with the ruling Zanu PF party.

“The Cabinet decision to abolish the Youth Officer posts under the Ministry of Youth, Indigenisation & Empowerment and transfer the roles and function to the Ward Development Coordinators in the Ministry of Women, Gender and Community Development is being implemented with immediate effect. This will rationalise the total Youth Officers and Ward Development Coordinators establishment down by 3,739 from 7,269 to 3,530, translating to savings of US$1.6 million per month and US$19.3 million per annum.”

The government is also proposing to remove other unqualified and aged civil servants. “Furthermore, 528 members of the Public Service without the requisite qualifications in terms of Section 18(4) e (ii) of the Public Service Regulations are being retired. The retirement of the above members will entail payment of a severance package estimated at US$8.7 million.”

More details to follow …