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Reserved business sectors law

Zimbabwe has introduced a new reserved business sectors law that blocks foreign nationals from operating in several everyday service industries. The policy has triggered concern, debate and confusion across the business community because it reshapes who can own and manage certain enterprises that have, for years, included a mix of local and foreign operators.

The reserved business sectors law was announced as part of the Indigenisation and Economic Empowerment regulations for 2025. It places a strict boundary around specific industries that the government now wants controlled only by Zimbabwean citizens. Officials describe the move as a way to widen participation for locals, but business groups warn that the sudden shift could create disruption across supply chains and stall new investment.

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Under the reserved business sectors law, a wide range of local service industries are now off-limits to foreigners. These include passenger transport services, taxis, car hire, barber shops, beauty salons, estate agencies, employment agencies, bakeries, advertising services, borehole drilling, artisanal mining and the marketing of local arts and crafts. Pharmaceutical retailing is also included. These industries, which often thrive on small-scale operations and high competition, will now require full local ownership.

Supporters of the reserved business sectors law argue that Zimbabweans should have priority access to the country’s most accessible business opportunities. They say that locals have long been squeezed out of these sectors by foreign operators with stronger financial backing. Those in favor believe the new rules may open doors for more local entrepreneurs to start and grow businesses that were once difficult to enter due to deep competition.

But critics see a different picture. They argue that the reserved business sectors law may scare away foreign investors at a time when Zimbabwe needs fresh capital, better efficiency and improved service quality. Many say the country’s economy benefits when both local and foreign operators compete, as this often drives better pricing, wider consumer choice and more reliable service delivery.

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There is also concern about timing. The economy is still battling low productivity, limited financing options and rising operational costs. Some analysts believe the reserved business sectors law could slow progress by reducing competition in key local service industries. Without diversity in ownership, consumers may face higher prices or limited access to products and services.

The law makes room for transitional arrangements. Foreign businesses that were already operating in restricted sectors before the changes came into effect have been given a three-year compliance window. During that period, they must sell 75 percent of their ownership to Zimbabwean citizens, at a rate of 25 percent per year. This is meant to soften the impact and give operators time to review their future in the country.

However, for many foreign owners, this transition under the reserved business sectors law is still costly and complicated. Some may not find reliable local partners. Others may choose to exit the market entirely rather than go through a forced restructuring. The potential for business closures raises questions about job losses, supply chain gaps and the overall health of the affected markets.

The law also sets strong conditions for foreign investors in other sectors where full exclusion does not apply. For example, retail and wholesale operations now require a minimum investment of US$20 million and 200 full-time employees for foreign participation. Haulage and logistics require US$10 million in investment and 100 employees. Such thresholds mean only large-scale investors can realistically remain active, while smaller foreign-owned firms may be forced out.

While industries such as banking and large-scale mining remain open to foreign investors, the reserved business sectors law marks a major restructuring of how local-level commerce operates. Small businesses are the backbone of Zimbabwe’s employment base, so restrictions in these areas could influence job creation and household income patterns.

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Local entrepreneurs hold mixed views. Some believe the reserved business sectors law creates a long-overdue opportunity to reclaim control of the domestic market. Others warn that protectionist rules rarely deliver long-term success if they are not paired with access to financing, business training and better infrastructure. For many aspiring entrepreneurs, the challenge will not only be access to the sector but also the capacity to operate at a competitive level.

Economists point out that the success of the reserved business sectors law will depend on fair enforcement, clear guidelines and the government’s ability to maintain a predictable regulatory environment. If implementation becomes inconsistent or politically influenced, business confidence may drop further, weakening the sectors the law is supposed to strengthen.

Consumers also stand to feel the consequences. If foreign operators withdraw and local companies struggle to fill the gap quickly, certain markets may see product shortages or service delays. Transport services, grooming services and small-scale retailing could experience noticeable changes in pricing and availability.

Regional observers are closely watching the rollout of the reserved business sectors law. Zimbabwe’s reputation for policy unpredictability has long been a concern for investors, and this new development adds fresh questions about long-term market stability. Policymakers will need to balance citizen empowerment with the need to keep the country appealing to investors who bring capital, technology and employment opportunities.

In summary, the reserved business sectors law represents one of the most significant shifts in Zimbabwe’s approach to local enterprise ownership. Whether it creates more opportunities for citizens or introduces new economic pressures will depend on implementation, state support for local businesses and the response of foreign investors. The coming years will show whether this policy move strengthens the country’s economic structure or limits its ability to compete in the regional market.

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