Zimbabwe minister threatens shutdown for firms not complying with indigenisation
Indigenization Minister Saviour Kasukuwere told the state-controlled Sunday
Mail newspaper that only 480 out of some 9,577 foreign-owned firms submitted
plans for indigenization to his ministry by a June 30 deadline.
Gibbs Dube | Washington 26 July 2010
Zimbabwean Minister of Indigenization Saviour Kasukuwere has threatened to
close more than 9,000 foreign-owned firms that have failed to submit plans
for the acquisition of majority stakes by indigenous black investors.
Kasukuwere was quoted by the state-controlled Sunday Mail newspaper as
saying that only 480 out of some 9,577 foreign-owned firms had submitted
such plans to his ministry by a June 30 deadline.
He said companies facing loss of trading licenses include De Beers Zimbabwe
Prospecting, sugar manufacturer Triangle Private Ltd. and top fast food firm
The government has revised indigenization regulations gazetted earlier this
year - but has not changed the requirement for a 51 percent stake to be
acquired by indigenous investors over the next five years.
Harare economist John Robertson told VOA Studio 7 reporter Gibbs Dube that
Kasukuwere's threats may lead some of those companies to submit the required
shareholding proposals to the government.
"We are yet to see whether all the companies will be intimidated by these
threats or the government will be taken to court and be challenged over some
of these indigenization processes," Robertson said.
Meanwhile, the government has told the top executives of all
state-controlled enterprises to report on their salaries as it moves to
reduce executive pay amounting in some cases to US$15,000 a month.
State Enterprises Minister Gorden Moyo said the Cabinet has resolved that
pay for top parastatal managers is out of line with economic realities and
must be rationalized to reflect current conditions. Parastatal executive
salaries range from US$11,000 to US$15,000 a month whereas most civil
servants make no more than US$175 a month.
Moyo said in an interview that the hefty salaries paid to top managers must
be cut because most state enterprises are not generating enough income to
Economist Godfrey Kanyenze of the Labor and Economic Development Research
Institute of Zimbabwe said pay for managers cannot remain at current levels
when state enterprises are failing to deliver basic services.