Zimbabwe’s Economic Transformation: The Finance Act No. 7 of 2025 and the Expanded Reserved Sectors
Zimbabwe’s economic landscape is undergoing a significant structural shift. With the enactment of the Finance Act No. 7 of 2025, the government has moved to consolidate domestic control over key industries by expanding the list of “Reserved Sectors.” This legislative update, coupled with the Indigenisation and Economic Empowerment (Foreign Participation in Reserved Sectors) Regulations, 2025 (S.I. 215 of 2025), sets a clear path for local ownership while providing a structured transition for existing foreign-owned enterprises.
The New Statute: Expanding the Reserved List
The Finance Act No. 7 of 2025 formally amends the First Schedule of the Indigenisation and Economic Empowerment Act [Chapter 14:33]. While previous laws reserved sectors like retail, passenger transport, and artisanal mining for Zimbabwean citizens, the 2025 amendment adds four critical sub-sectors to this list:
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Quarry Mining (Item 18): All extraction of rock, stone, sand, and gravel for gain.
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Brick Moulding (Item 19): Shaping bricks from clay or earth, whether by hand or machine.
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Granite Mining (Item 20): The process of extracting granite rock, including exploration and removal of large slabs.
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Travel Agency Business (Item 21): Acting as an intermediary between travelers and service providers (flights, hotels, tours).
By placing these sectors in the “Reserved” category, the government aims to empower local entrepreneurs in industries that require moderate capital but offer high community impact.
The 3-Year Grace Period: A Phased Exit for Foreign Owners
To prevent economic shock and ensure a smooth transfer of ownership, the law introduces a three-year grace period for foreign-owned businesses already operating in these newly reserved sectors.
Under Section 6 of S.I. 215 of 2025, existing foreign enterprises must divest a total of 75% of their equity to Zimbabwean citizens. The law mandates a strict annual schedule to ensure compliance:
| Timeline | Requirement | Remaining Foreign Equity |
| Year 1 | Divest 25% of shares to local citizens | Max 75% |
| Year 2 | Divest another 25% | Max 50% |
| Year 38 | Final 25% divestment9 | Max 25%10 |
This three-year “glide path” allows foreign owners to identify local partners, negotiate fair market valuations, and ensure that operational expertise is transferred effectively without halting business activities.
Regularisation and Penalties
The window for compliance is narrow. Existing foreign businesses are granted thirty (30) days from the gazetting of the regulations to submit their regularisation plans to the Indigenisation and Economic Empowerment Unit.
Failure to comply with the divestment schedule or operating without the required permits carries heavy consequences:
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Fines: Up to level eight.
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Imprisonment: Sentences ranging from three to five years.
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Administrative Bans: Non-compliant entities can be barred from participating in any reserved sector and prohibited from conducting business with any government entity for five years.
Strategic Stability
Importantly, the government has clarified that this “indigenisation drive” is currently targeted at the consumer, service, and small-to-medium extractive industries. Major parts of the economy—such as large-scale mining (outside of granite and quarrying) and banking—remain open to foreign control for now. This distinction is intended to maintain Zimbabwe’s appeal to large-scale Foreign Direct Investment (FDI) while simultaneously fostering a robust “indigenous” middle class.
