Reserved sector compliance monitoring underway

THE Government has launched a reserved sector compliance monitoring exercise across Manicaland Province as part of efforts to safeguard business sectors reserved exclusively for indigenous Zimbabweans and ensure adherence to the country’s indigenisation regulations.
The exercise, which is being spearheaded by the Ministry of Industry and Commerce, targets 21 sectors reserved for Zimbabwean citizens under the Indigenisation and Economic Empowerment (Foreign Participation in Reserved Sectors) Regulations.
Among the sectors covered are retail and wholesale trade, barber shops, hairdressing and beauty salons, bakeries, employment and advertising agencies, artisanal and small-scale mining, valet services, passenger transport services, customs clearing, tobacco grading and packaging, pharmaceutical retailing, borehole drilling, estate agency services, marketing and distribution of local arts and crafts, and small-scale grain milling.
Ministry of Industry and Commerce Manicaland Provincial Director, Mr Kupukani Masunungure, confirmed that the monitoring exercise is already underway in several parts of the province.
“So far, the programme has been conducted in Mutare Urban, Rusape and Murambinda Town Centre. The response from the business community has largely been positive. Some foreign businesspeople operating in reserved sectors have expressed willingness to sell part of their shareholding to local investors, although we have also encountered cases where locals are fronting for foreign nationals,” said Mr Masunungure.
The compliance exercise is being carried out in terms of Statutory Instrument 215 of 2025, which was gazetted on December 11, 2025, to regulate foreign participation in sectors reserved for Zimbabwean citizens.
Mr Masunungure said the regulations are designed to promote local participation in key areas of the economy where foreign ownership had become dominant.
“The regulations focus on foreign ownership in specific reserved sector business types. Government has designated 21 sectors for exclusive participation by Zimbabwean nationals. These include retail and wholesale trade, transport services, artisanal mining, real estate agency services and borehole drilling, among others.
“The objective is not to completely exclude foreign investors, but to increase local participation in sectors where foreign ownership has become concentrated. Ultimately, the policy seeks to protect local enterprises, strengthen domestic capital formation and ensure that a larger share of profits remains within Zimbabwe,” he said.
Under SI 215 of 2025, foreign-owned businesses operating in reserved sectors are required to submit regularisation plans to the Ministry of Industry and Commerce through provincial offices or the ministry’s head office.
The regulations also provide a three-year divestment framework requiring affected businesses to transfer at least 75 percent of their shareholding to Zimbabwean citizens. The divestment is to be undertaken in annual tranches of 25 percent.
Mr Masunungure said foreign investors wishing to continue operating in reserved sectors must obtain permits from the National Indigenisation and Economic Empowerment Unit and meet a number of statutory requirements.
“Foreign investors are required to register their businesses in Zimbabwe, obtain ZIMRA tax clearance, maintain local bank accounts and meet prescribed investment or employment thresholds. They must also provide proof of payment of the Standards Development Fund Levy when submitting their regularisation plans,” he said.
He noted that the regulations still provide room for foreign participation in selected sectors where substantial investments are made.
“There are sectors where foreign investors may still participate, provided they meet specified investment and employment thresholds. For example, retail or wholesale businesses valued at US$20 million employing at least 200 people, grain milling operations valued at US$25 million with a minimum workforce of 50 employees, and haulage businesses valued at US$10 million employing no fewer than 100 workers,” said Mr Masunungure.
He warned that authorities would not hesitate to act against businesses that fail to comply with the regulations.
“Businesses that do not regularise their operations risk having their trading licences suspended or revoked. Zimbabweans who assist foreign nationals in circumventing the law through fronting arrangements may also face penalties,” he said.
Mr Masunungure said the ongoing compliance exercise is expected to strengthen enforcement of the regulations while creating greater opportunities for indigenous Zimbabweans to participate meaningfully in key sectors of the economy.-herald