A man wearing a hat decorated with worthless notes during a protest against government plans to introduce bond notes in Harare Zinyange Auntony/ AFP

A day after the US surprisingly removed Zimbabwean firms and individuals from its sanctions list, the country's president, Robert Mugabe, announced plans to soften a controversial black empowerment law.

Instituting the 2008 "indigenisation and employment" law was one of Mugabe's central pledges ahead of his re-election in August 2013. The head of state earlier this year announced he would enforce legislation that obliges foreign-owned companies to hand over at least 51% of their shares to black Zimbabweans. In March, he said banks would be among a number of sectors to be exempt but also threatened to shut down all firms that failed to comply.

While the law was never fully enforced, many – including the International Monetary Fund (IMF) – claim it has choked off investment, amid an economy in shambles.

Mugabe said the controversial legislation is among several laws that will be discussed in parliament.

"The indigenization act will be amended to bring it into consonant with policy changes enunciated by my government in April this year. The Computer, Crime and Cyber Bill will be tabled to deal with what governments the world over are grappling with," Mugabe said at the opening of parliament on 6 October, without giving details.

The announcement comes as the government is seen to be desperate to find ways to alleviate the economic crisis in the country.

In May, Zimbabwe's central bank said it would print its own version of the US dollar – effectively introducing bond notes, a form of domestic currency – to ease an acute shortage of hard currency in the crisis-hit African country.

Last month, the cash-starved authorities announced the Central Bank will set up a "diaspora remittance system" to make it easier for Zimbabweans abroad to send money home.

A highly criticised 'Indigenisation law'

Mugabe has always maintained the law is aimed at empowering the majority black population which "suffered losses" at the hands of the colonial power.

"We know what we have suffered and we know what we should not do to suffer again or to benefit those who made us suffer in this bloody way," the long-term leader said in April 2016.

Critics within the opposition, however, claim the legislation has benefited Mugabe and his allies within the ruling Zanu-PF party, and that is is driving away desperately-needed foreign investment.

The law affects white and foreign-controlled companies including mining companies such as Anglo American Platinum, Impala Platinum and Aquarius Platinum. The firms are obliged to transfer a majority of shares in their local operations to the government, mining communities, employees and an empowerment trust.

In 2014, IMF said the law needed to be clarified as it will help allay negative perceptions on the security of investments, and reassure markets of the government's open invitation to invest in Zimbabwe.