Zimbabwe to kick out Chinese, Indian retail businesses
Tawanda Karombo (Harare ) – Chinese and Indian nationals with businesses in Zimbabwe are lobbying for President Robert Mugabe’s intervention to reverse a looming business shut down crisis following recent revelations that Zimbabwe’s coalition government was drafting a legislation that will kick out non-white foreign businesses in the retail sector.
China and India enjoy cordial relations with Zimbabwe – which has increasingly been shunned by western countries and the United States over gross human rights abuses and failure to fully implement the government of national unity put in place to address the country’s decade long economic and political crisis.
Mugabe was recently in China were the Chinese government reiterated its support for Zimbabwe while Nigerian nationals, some of whom have married Zimbabwean women to circumvent the country’s immigration laws, now command the greater share of the clothing and electrical appliances markets.
The number of Chinese and Indian nationals doing business and staying in Zimbabwe has phenomenally increased over the past three to five years whilst Chinese owned businesses – accused of selling non-durable and backyard manufactured goods – have taken up most of the retail markets.
Local businesses, lead by the militant Affirmative Action Group (AAG) have over the last couple months put pressure on the government to move in swiftly to avert a “dire situation” that is seeing Nigerians, Chinese and Indian nationals enjoy “doing business in the country at the expense of black Zimbabweans” who were previously economically disadvantaged. And this week, the National Indigenisation and Economic Empowerment Board (NIEEB) announced that it was finalizing a move that will result in the government putting together the various pieces of law that regulate investments in the country’s economy.
To this end, said David Chapfika, a former Zanu PF parliamentarian and now chairman of the NIEEB, the government will harmonize all legislation regulating foreign investment to realign them with the goals of the Indigenisation and Economic Empowerment Act, a controversial law that has sparked investor skepticism and stalled progress towards full economic recovery. “Sectors reserved for indigenous people will be reserved for indigenous people. Convergence of legislation will be initiated,” said Chapfika.
He said the Indigenisation and Economic Empowerment Act was very clear in its statutes which deal with investments in the various sectors of the economy. Chapfika underscored that the retail sector was “reserved for indigenous people” according to the controversial localization law. “It refers to indigenous Zimbabweans, not blacks all over Africa,” added Chapfika.
The Indegenisation law classifies indigenous Zimbabweans as “any person who, before the 18th April 1980, was disadvantaged by unfair discrimination on the grounds of his or her race, and any descendant of such person, and includes any company, association, syndicate or partnership of which indigenous Zimbabweans form the majority of the members or hold the controlling interest”.
This automatically means that Chinese and Indian nationals who have dominated the bigger share of the retail market for clothing, electrical and home appliances, entertainment, fast foods, and photo processing will now be targeted.
But the Chinese and Indian business men and women and their Nigerian counterparts have said that they will not take this “lying down” and just “watch our businesses dissolved”. A cross section of Indian and Chinese nationals, some of whom have been in the country for over two years, said they will lobby through their respective embassies for President Robert Mugabe’s intervention as their country has a trade pact with Zimbabwe.
“Our country has a right to protect our business interests here and we will talk to the embassy for an audience with the President so that we can explain to him that we want to do business here,” said one Chinese retailer who runs a shop that sells computer accessories, camera equipment and other consumables.
Others said Zimbabwe could not afford to force the closure of Indian and Chinese owned businesses as this “will sour relations” with China which has opposed the imposition of a full embargo against Zimbabwe at the United Nations (UN). “Diplomacy has to be seen to be working and we will want Zimbabwe to treat us as special people because our government has rendered support to this country,” said another Indian trader.
Chinese and Indian businesses employ over a quarter of the country’s working populace although this could not immediately be verified because most of the businesses are non-formal businesses.
However, the Zimbabwe Investment Authority Act states that a non-Zimbabwean investor can apply for a licence to operate a retail business without restriction, a statute that Chapfika said will be revised to consolidate the position of black Zimbabweans in the economy.
The newly constituted NIEEB’s principal mandate is to ensure that at least “51% of Zimbabwe’s economy is indigenized in five years,” a local newspaper said. It adds that the NIEEB “has the legal leeway to come up with the relevant mechanisms and terms of reference”.
