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Zim law 'no reason to panic'
11/03/2008 17:08 - (SA)
Harare - Zimbabwe's government sought on Tuesday to allay fears over a new equity law to give locals a controlling share in business ownership, saying it would not lead to expropriation of foreign-owned firms.
"This is not going to be expropriation," Indigenisation and Empowerment Paul Mangwana told a news conference.
"We recognise that businesses that are already in existence will need time to adjust. There is going to a lot of engagement and consultation and the time frame could be five to 10 years. There is no reason to panic."
Veteran President Robert Mugabe, facing elections this month, gave his seal of approval last week to the indigenisation and economic empowerment act which requires locals to own a 51% stake in all firms.
Mangwana said the law was meant to benefit the majority of Zimbabweans who were discriminated against by colonial laws in the southern African nation that gained independence from Britain in 1980.
"Blacks were not allowed to open current accounts or start businesses. This is the time to redress that," Mangwana said. "The revolution is not complete until indigenous Zimbabweans own the means of production.
"Japan is owned by the Japanese, China by the Chinese...and Zimbabwe should be owned by Zimbabweans."
He said prospective foreign investors will be required to identify locals to have joint ventures with and said the government would not be involved in their negotiations.
Will use discretion
"The government will only be involved where a foreign investor says they can't find a suitable indigenous partner," Mangwana said.
"We will go to our database and match them with a suitable partner in their respective sector."
According to the new law, investment by foreigners will not be approved unless a controlling stake is reserved for locals.
When it was mooted last year, the law raised fears among foreign-owned companies operating in Zimbabwe that they will lose control of their firms.
But Mangwana said on Tuesday the government can use its discretion to allow foreign companies to own more than 51% shares.
The law also provides for the establishment of an economic empowerment board to give loans to locals intending to acquire shares, start businesses or expand existing ventures.
Eight years ago, the government launched controversial land reforms which saw the state seizing at least 4 000 white-owned farms for redistribution to landless blacks.
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