HomeBase MetalsZimbabwe government remains divided on local ownership

Zimbabwe government remains divided on local ownership

Robert Mugabe
Harare, Zimbabwe — MININGREVIEW.COM — 15 April 2010 – President Robert Mugabe has publicly denied yesterday’s statement by the prime minister’s spokesman, saying that Zimbabwe has not suspended its drive to transfer control of foreign firms to local blacks, but is simply trying to improve the regulations.

Mugabe said the government had not suspended regulations issued last month by youth, indigenisation and empowerment minister Saviour Kasukuwere, requiring foreign firms to give details of their shareholding structure and plans to achieve majority local control.

On Tuesday Prime Minister Morgan Tsvangirai’s spokesman James Maridadi said the cabinet had agreed to suspend and review the regulations.

The requirement for black Zimbabweans to be handed control of foreign firms operating in the country has divided the troubled one-year-old unity government of Mugabe’s ZANU-PF and Tsvangirai’s Movement for Democratic Change.

Analysts say it will discourage foreign investment and damage efforts to rebuild an economy that shrank by more than 40% during a crisis-ridden decade before rebounding in 2009.

“Reports of suspension are completely false. There is no nullification of the indigenisation and economic empowerment law, and no nullification of the regulations which have been made,” Mugabe told reporters as he toured tobacco auction floors here. “What is there is that the regulations are being studied by a committee of cabinet just to improve on them.”

The regulations took effect on 1 March and gave foreign-owned firms, including banks and mines, 45 days to file proposals on how they planned to sell 51% of their shares to black Zimbabweans within five years. The deadline for submitting proposals is today.

Kasukuwere told Reuters earlier in a telephone interview that the process had not been frozen, underlining the power struggle under way between ZANU-PF and the MDC. “That statement (by Maridadi) is at variance with the position taken by cabinet. Someone is trying to play politics here,” Kasukuwere said.

“The regulations have not been suspended. It’s business as usual and businesses are encouraged to continue furnishing us with their empowerment proposals. The correct position is that we continue to interact with business, but we also continue to receive proposals,” he explained.

“We are not insisting on these companies becoming indigenous today. We are getting them to state how they propose to achieve compliance, and then we will deal with their proposals sector by sector.”

The government says Zimbabwe needs at least US$10 billion (R750 billion) to rebuild the economy, but Reuters reports that foreign donors and investors are waiting for reforms and signs that Mugabe is ready genuinely to share power.