Zimbabwe signals step back over black ownership law

2014-04-23 08:58

Zimbabwe won’t force all foreign-owned companies to sell or cede 51% of their shares to black Zimbabweans, and will work on a new model to ensure locals have a stake in the economy, the finance minister has said.

“We’re not taking 51% of anyone’s money,” Patrick Chinamasa told reporters in the capital, Harare, yesterday. “There’s no one-size-fits-all [solution].”

Zimbabwe will decide how much of foreign companies local blacks should own “sector by sector”, he said, and the government is “quite comfortable” with the injection of foreign capital in the banking industry because it “will increase the volume of credit to the productive sector”.

Chinamasa said Zimbabwe’s indigenisation minister, Francis Nhema, will put proposals to the country’s cabinet soon.

Zimbabwe’s Parliament passed the 51% ownership law in 2008, and three years later the government began enforcing it, compelling foreign and white-owned companies with assets of more than $500 000 to shift majority ownership to black Zimbabweans.

Miners were in the front line, and companies such as Impala Platinum, Anglo Platinum and Aquarius Platinum have already complied with the law.

The easing of the indigenisation requirements comes as Zimbabwe’s economy shows signs of deflation caused by a fall in consumer spending since elections last year.

Chinamasa said that time frames for allocating shares to Zimbabweans will be decided separately for each industry. Banks operating in the country that could potentially be affected include Barclays, Standard Chartered and South Africa’s Standard Bank.

“What we have said is that we want to encourage local participation,” Chinamasa said. “They will do it on the basis of a given framework, and also they pick their partner and they decide the price.”

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