'No room for abuse!' - Zimbabwe pushes foreign firms to cede 75% ownership in bid to empower local businesses

"Zimbabwe's Industry Minister, Nqobizitha Mangaliso Ndlovu, has activated 'Statutory Instrument 215', requiring foreign companies in designated sectors to localise ownership or exit the market by 2027. Under the measure, firms operating in 14 'reserved sectors', including retail, transport, bakeries and brick-making, must transfer a 75 per cent stake to local investors or cease operations. Speaking from Harare on Wednesday, Ndlovu said the policy had long existed but would now be enforced more 'aggressively'. “It's important to acknowledge that it has been within our legal frameworks for more than a decade. It would have given a clear indication to our investors on the government's policy intent,” he said. He added that while implementation had previously been limited, the government now intends to ensure citizens benefit more directly from economic activity. "Our economy has been growing almost phenomenally over the last seven to eight years, mainly driven by huge capital coming from abroad," Ndlovu said. "But at the rate at which we are going, the majority of Zimbabweans are being left behind." "While we celebrate foreign direct investment, we need to direct it where we need it most," he added. "The president's desire is that he leaves no one and no place behind." The policy targets low-barrier sectors in an effort to protect small local businesses from being displaced by larger foreign operators. Ndlovu said the government is engaging with investors to address concerns, stressing the move does not amount to expropriation. "This country is very open for business. It's very open for business. But in being open, it cannot be open to abuse," he said. "Like I have said, there are very limited areas that we have targeted." Critics argue that forcing 75 per cent divestment risks sending a negative signal to international investors, with analysts comparing the measure to the country’s 2008 indigenisation policy, which was later scaled back after being blamed for capital flight and economic stagnation. The government, however, maintains that everyday commercial sectors, including bakeries, hair salons and small-scale retail, have increasingly been dominated by better-capitalised foreign operators. By reserving these sectors for citizens, authorities say the policy is intended to create 'breathing room' for domestic small and medium-sized enterprises, ensuring that informal and small-scale formal businesses remain a viable source of livelihoods."

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