It appears that State participation, indigenisation and economic empowerment are still applied in various parts of the continent in a manner distinctive to each region, possibly as a result of the different historical backgrounds of the countries in which they are implemented. As a general overview, indigenisation does not seem to exist in Francophone Africa and more generally in West and Central Africa. In these countries, State participation seems to be mandatory only for companies created for the operation of mining projects. This is the case for all member countries of the West African Economic and Monetary Union (UEMOA) where the State must have a shareholding of 10% (Benin, Burkina Faso, Mali, Niger, Senegal…). This is also the case in Guinea, where this shareholding may be as much as 35%, 5% for the DRC or 15% for the Central Africa Republic.
Indigenisation and economic empowerment appear to be a trend in Southern and Eastern part of Africa and although several colonial influences exist in these regions, the Anglo-Saxon and Portuguese heritage remains a common feature, as does the fact that colonialism lasted far longer in this region than elsewhere on the continent. As a result, these States faced severe and potentially destabilizing disparities of wealth and resources between rich and poor at the attainment of their independence from colonial rule which, because of the economic policies of colonialism, was based on the colour line. This has been the case in the more commonly-discussed examples of South Africa and Zimbabwe but also to some extent in Namibia, Botswana, and Angola.
Indigenisation, such as in Zimbabwe, aims at giving a “controlling interest” of not less than 51% of the shares or interest in an enterprise to black indigenous Zimbabweans. Every company in respect of which 51% of the shares or a controlling interest is not held by indigenous Zimbabweans and whose net asset value is above certain thresholds (depending on the industry) must submit an indigenisation plan detailing how and when a controlling interest of its business will be transferred.
Indigenisation in other countries has been a relatively smooth process. In Angola, the “Angolanisation” policy seeks to ensure preferential treatment of Angolan Businessmen and also stipulates that companies must conform to a ratio of 70% national workers to 30% foreign workers.
In Botswana, the Government proactively encourages Citizen Businesses and Entrepreneurs. Certain categories of tenders are restricted to Citizen-owned companies only and Citizen-owned or Majority Citizen-owned companies enjoy preference during tender evaluations. Certain manufacturing activities are also restricted to Citizens and Citizen-owned companies. The Government has set up the Citizen Entrepreneurial Development Agency to provide fledgling citizen-based companies with technical, financial and managerial assistance.
Other countries tend to apply this policy for very specific and strategic sectors. This is the case in the DRC where land concessions for agriculture shall only be granted to Congolese individuals or companies having the State or Congolese individuals or Companies as shareholders.
The more sophisticated policies appear to be Namibia’s New Equitable Economic Empowerment Framework (NEEEF) which aims to provide a clear overarching policy framework into which all other policies will slot, promoting transformation in business through the five pillars of Ownership, Management Control and Employment Equity, Human Resources and Skills Development, Entrepreneurship Development and Community Investment; and of course South Africa’s BBBEE.
We will however continue to keep an eye on the evolution of the Economic Empowerment Policy in Tanzania and Zambia’s Citizen Economic Empowerment which seem to be very influenced by the South African system.
via www.lexology.com
Written by Sebastien Thouvenot of Edward Nathan Sonnenbergs. This is the most succinct overview I've read.
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