Zimbabwe sticks to 51% indigenisation with platinum mines, Government commits to settling debt arrears

Zimbabwe's finance minister Patrick Chinamasa has ourlined a series of economic reforms under new President Emmerson Mnangagwa's government, including accelerated efforts to re-engage with international financiers.

By Tawanda Karombo

ANGLO American Platinum, Impala Platinum and Sibanye Stillwater will still be required to cede 51 percent shares in Zimbabwean operations under indigenisation requirements which have been scrapped for all other sectors, although the platinum miners have received a reprieve after the government deferred a tax on platinum exports to 2019.
This forms part of economic policy reforms that Zimbabwe outlined under its 2018 budget and fiscal policy statement yesterday under new President Emerson Mnangagwa.
Finance Minister Patrick Chinamasa said in parliament that Zimbabwe’s economy will likely would probably grow by 4.5 percent in 2018 and was on course for 3 percent growth this year.
“The government intends to amend the indigenisation policy to bring into effect the following: in the extractive sector of mining, the 51 percent shall apply only to diamond and platinum mining.
“It will not apply to any other mineral or any other sector of the economy which will be open to any other investor regardless of nationality,” Chinamasa said.
Implats’ majority-owned Zimplats exports a semi-processed matte, while Unki mine, owned by Anglo Platinum and Mimosa – controlled by Implats and Sibanye – are far behind in the beneficiation chain.
Zimbabwe has already consolidated the diamond mining industry after setting up a single company that mines diamonds and in which the state owns half of the shares.
“The government has also deferred the 15 percent tax on exports of unprocessed and semi-processed platinum to the 1st of January 2019,” Chinamasa said.
Zimbabwe has also reduced mining ground rental fees from $3 000 (R40 535) to $225 per hectare per year, according to the 2018 budget statement.
The government will fast-track re-engagements with international financiers such as the International Monetary Fund, World Bank and others to secure fresh funding.
Zimbabwe has committed to start settling its debt arrears, which have ballooned to more than $9 billion.
However, Chinamasa said the government would still pay bonuses to civil servants for the 2017 year, but these would be paid in 2018 on a staggered basis.
Revenue collections for 2018 are expected to be $5.1 billionbn against expenditures expected to be $5.8 billionbn, with $4.4 billionbn going towards recurrent expenditures.
Chinamasa said Zimbabwe would collapse the public wage bill to about $3.2 billionbn, accounting for about 70 percent of the budget, down from the previous position, which saw public wage costs gobble 86 percent of government earnings.
Other measures that Chinamasahe outlined include tightening costs through abolishing business class for government officials, cutting fuel allocations and restricting personal car allocations to director-generals and directors in government departments, as well as reducing diplomatic missions.
A voluntary retirement scheme will also be introduced for the civil service, while those above 65 years will be retired next year, in addition to the abolishment of 3 740 youth officer posts. Zimbabwe will have to provision for about $1.2 billion maturing obligations, mostly under treasury bills and faces a $1.7 billion budget deficit for 2017. – Source: Independent Media

 

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