Firm Grab


Zimbabwe’s Chamber of Mines asked Vice President Joice Mujuru to intervene and secure an extension of a deadline for foreign companies to cut their stake in local operations to 49 percent, Newsday reported, citing Victor Gapare, the chamber’s president.

Miners should be given 5 to 10 years to comply with the directive instead of six months, the Harare-based newspaper cited Gapare as saying in a letter to Mujuru. The Indigenization and Economic Empowerment Act may result in a decline in production at the country’s mines and capital flight, it said.

Buyers of the shares won’t be able to raise the money for the sale now given liquidity constraints in the country, the newspaper reported.

(Source)

Indigenisation Minister Saviour Kasukuwere on Wednesday said regulations to force foreign firms to offload controlling stake to local blacks will come into force next Monday, appearing to brush aside objections to the controversial rules by Prime Minister Morgan Tsvangirai.

Under the regulations announced by Kasukuwere in line with an Indigenisation and Economic Empowerment Bill passed by the then ZANU PF-controlled Parliament in 2007 and signed into law by President Robert Mugabe in March 2008, foreign owned firms will be required to cede 51 percent of shareholding to indigenous Zimbabweans within the next five years.

Tsvangirai has opposed the laws saying they were invalid because they were never discussed and adopted by Cabinet, while business leaders have been lobbying government to shelve implementation of the regulations they say will only help reinforce perceptions of Zimbabwe as a high political risk investment destination.

But Kasukuwere was adamant implementation of the regulations would go ahead as planned.

He said: “Consultations are on going but the Act will be effective. The Act will become effective March 1 as already stated. We can’t have gatherings every time to finalise this matter. Consultations will always be there, but the law will become effective Monday.”

Under the empowerment regulations foreign-owned businesses operating in Zimbabwe, including banks, mines and factories will be forced to sell a majority stake to locals by March 2015.

The regulations provides for foreigners to be compelled to sell stake to local Zimbabweans but are silent on where impoverished locals will get money to pay for stake in large mines and industries.

Many had hoped the law and other controversial laws including repressive press and security laws to be repealed following formation of the power-sharing government.

Revival of the empowerment laws has sparked fears among business of a repeat of in industry of a repeat of the chaos that befell agriculture after a similar government programme to empower blacks saw white-owned commercial farms seized without compensation.

(Source)