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New Zim law not for all firms
11/03/2008 14:17 - (SA)
Harare - Zimbabwe will not force black partners on foreign companies and not all these firms would be forced to sell a majority stake to black Zimbabweans under a new nationalisation law, a government minister said on Tuesday.
President Robert Mugabe, who faces a tough re-election later this month, on Sunday signed a bill giving locals the right to take majority control of foreign companies. Analysts warned this could deepen the economic crisis ravaging the southern African country.
"It's not every business which will have to have 51% indigenous ownership. The minister will prescribe on the basis of capital (investment) and employment levels," Paul Mangwana, minister for indigenisation and empowerment, told a news conference.
Mangwana told reporters the government will not force black partners onto foreign companies and said the government will draw up a timeframe for the process it calls indigenisation.
"We will not force partners on companies. Only when an investor fails to identify a suitable partner will government step in because we will have a databank of potential investors," he said.
Zimbabwe is already suffering from foreign investor flight, the world's highest inflation rate of over 100 000% and severe food, fuel and foreign currency shortages.
Big political challenge
Mugabe is digging in for March 29 elections, facing one of the biggest political challenges in his 28 years in power after former finance minister Simba Makoni broke ranks with him and announced he will run as an independent.
Makoni's chances of victory in the polls were boosted when Dumiso Dabengwa, a senior member of Mugabe's ruling ZANU-PF, endorsed him.
Mugabe also faces long-time rival Morgan Tsvangirai, leader of the biggest faction of the opposition Movement for Democratic Change (MDC), in the polls.
Analysts say Mugabe may be dangling shares in foreign-held companies to those who may seek to back his opponents.
Foreign companies still active in Zimbabwe include platinum miners Impala Platinum, Anglo American Platinum (Angloplat), Aquarius Platinum, Britain's Barclays Plc and Standard Chartered.
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