President Robert Mugabe’s government will review controversial legislation that has deterred foreign investment and dented Zimbabwe’s economy, an official says.
The administration is setting up a special task force to amend the so-called indigenization law, which requires foreign-owned companies to cede a 51% stake in their business to locals, said Mr. Mugabe’s spokesman George Charamba.
Mr. Mugabe’s government, which won a disputed election last year, said it aimed to make the law more flexible in its application to industries ranging from mining and banking to retail and food processing.
“The law is standing in the way of foreign direct investment,” said Mr. Charamba, who has been briefed on cabinet meetings.
The amendments to the 2008 law, which the government says it will push through in the next few months, reflect an urgent government effort to avoid a repeat of recent history—when an economic implosion nearly drove Mr. Mugabe from power. Some investors are taking note of the changed tone from officials, and cautiously stepping up investment in Zimbabwe.
“They’re not idiots,” said Andrew Lapping, a Cape Town fund manager at Allan Gray Proprietary Ltd. who is investing in Zimbabwe’s platinum sector. “Zimbabwe is the place I’m most bullish about.”
The country’s growth fell in 2013 to 3% from 10.6% the year before. Mining companies have invested money to maintain output but say they haven’t grown as much as they would if the investment climate was more favorable and clearer. The International Monetary Fund forecasts 4.2% growth in 2014, helped by exports.
more at http://online.wsj.com/articles/zimbabwe-reviews-disputed-law-1401396486