Businesses Seek Policy Clarity on Reserved Sectors Law

CLOUDINE MATOLA

Businesses have called on the government to provide clearer guidance on the implementation of the empowerment policy, Statutory Instrument 215 of 2025 (SI 215/25), warning that uncertainty around the regulations could unsettle investment and disrupt operations, Business Times can report.

The policy targets 14 reserved sectors—including retail, transportation, and selected services—and requires foreign-owned firms operating in those areas to submit compliance plans to cede 75% shareholding to local investors within three years.

Speaking at Reserved Sectors Implementation Modalities breakfast meeting, Zimbabwe National Chamber of Commerce chief executive Tapiwa Karoro said the private sector is concerned that SI 215/25 lacks clarity on sector boundaries, exemptions, and the treatment of integrated business models.

He added that the policy currently provides insufficient practical guidance on how it will be interpreted and applied.

“Allow me to outline the key sentiments expressed by our membership.

Firstly, on clarity and certainty. Businesses are requesting precise and practical guidance on how the policy will be interpreted and applied. While Statutory Instrument 215 of 2025 provides a schedule of reserved sectors and thresholds, members remain uncertain about definitions, sector boundaries, exemptions and the treatment of integrated business models. These uncertainties echo challenges experienced under earlier empowerment frameworks. Members therefore seek clear subsidiary guidance, published interpretations and harmonised application across institutions to reduce discretion and compliance risk. Secondly, on transition arrangements and protection of legitimate investments.

“Members are particularly concerned about how existing businesses, especially those with long-term investments, will be treated. Zimbabwe’s economy includes firms that invested under previous policy regimes, entered joint ventures, secured financing and built supply chains on the basis of then prevailing values. Private sector sentiment is that empowerment must be forward-looking and developmental, not retroactive in the manner that undermines contractual certainty or asset security. Clear transition periods, regularisation mechanisms and predictable localisation pathways where applicable are therefore critical. Empowerment that destroys value does not empower anyone. Thirdly, on implementation capacity and coordination,” Karoro said.

SI 215 enforces provisions of the Indigenisation and Economic Empowerment framework, which mandates majority local ownership in designated sectors.

Karoro warned that without strong institutional coordination, the policy risks fragmented enforcement and regulatory confusion.

“Businesses interact with multiple authorities across central government and local government. Members are concerned that without strong coordination, the reserve sector’s policy could be implemented unevenly, creating regulatory fragmentation and compliance confusion. Private sector sentiment strongly favours a single coordinated implementation framework with clearly defined institutional roles, consistent enforcement standards and streamlined administrative processes, particularly for our small to medium-sized enterprises.

Fourth, on competitiveness and industrial growth. Members consistently stress that empowerment must reinforce, not weaken, competitiveness. Many reserve sectors are embedded in wider value chains, supporting manufacturing, retail and exports,” he said.

Legal practitioners also raised concerns about definitional precision within the statutory instrument. Legal expert Nelly Tiygo said while the policy direction is understandable, its technical framing remains inadequate for complex sectors.

“Is this a good policy? Policies are good, right? It is how we implement them which is going to be interesting. I love the fact that we now have definitions, as a lawyer who assists a lot of clients that come into the country to invest, and even local investors that are in-country already, it is good to now have definitions for the sectors that have been provided, because now we can see where we’re supposed to be applying and not applying. My challenge is that, and I will be honest, I feel like the definitions were extracted from a dictionary, so they don’t quite speak to all the sectors in the, using the standard language, for example let’s use milling, I know that there’s different forms of milling, and from this processing there’s grinding, there’s a lot, but now we have put small-medium enterprise type of milling at the level of the more bigger investor milling. So the definitions, good to have, but I think they need to be more technical versus the ones that are being extracted from the dictionary. I’m saying this with all due respect,” she said.

Industry players say clearer definitions, transitional safeguards, and a coordinated implementation framework will be essential to ensure the policy achieves its empowerment objectives without undermining investor confidence or industrial growth.