Country to change black empowerment law to reassure investors

October 6, 2016 12:27 PM

Mugabe in April said the law was confusing businesses and made it hard for Zimbabwe to compete for foreign investment.

Zimbabwe's President Robert Mugabe addresses the decision making body of his ruling ZANU PF party in Harare, Zimbabwe, September 9, 2016.

Zimbabwe will amend a black empowerment law that aims to transfer majority shares from foreign-owned firms to locals after it was blamed for deterring investment, President Robert Mugabe said on Thursday.

The indigenization and economic empowerment law requires foreign companies, including mining firms and banks, to transfer at least 51 percent of shares to black Zimbabweans.

But implementing the policy has been difficult, with Mugabe's ministers often issuing conflicting statements.

"The relevant Act will thus be amended to bring it into consonance with enunciated policy," Mugabe told parliament, without giving details.

In its current form, the empowerment policy requires foreign-owned miners like Anglo American Platinum, Impala Platinum and Aquarius Platinum to cede 51 percent shares in their local operations to the government, mining communities, employees and an empowerment trust.

Mugabe said in April mining companies would be deemed to have complied with the law if they retain 75 percent of the value generated from local minerals in Zimbabwe.

Mining accounts for more than half of all export earnings, but the southern African nation has struggled to attract large-scale investment due to the empowerment policy.