Business wants empowerment laws shelved

HARARE – Zimbabwe business leaders say they will ask the government to shelve implementing new empowerment regulations compelling foreign-owned firms to cede controlling stake to locals to allow more consultations on the matter.

The Indigenisation and Empowerment Ministry on Tuesday announced through state media a new set of empowerment regulations that sent foreign-owned firms into panic with threats of imprisonment for foreign shareholders (or presumably their local representatives) who fail to sell 51 percent stake to indigenous Zimbabweans within the next five years.

Prime Minister Morgan Tsvangirai, keen to present Zimbabwe as an investor-friendly country, immediately attempted to shoot down the indigenisation regulations saying they were invalid because they were never
discussed and adopted by Cabinet.

But business leaders – no doubt driven by a desire to avoid the chaos that befell agriculture after a similar government programme to empower blacks saw white-owned commercial farms seized without compensation – are leaving no stone unturned in their bid to forestall the threatened company seizures.

Confederation of Zimbabwe Industries (CZI) president Kumbirai Katsande told ZimOnline on Wednesday that business would lobby the government over the new regulations that Indigenisation and Empowerment Minister Saviour Kasukuwere said will become effective on March 1.

He said: “We are not against indigenisation but any policy must be coordinated and not scare away investors. We need clarity on the policy and the policy must not be done in any partisan manner that benefits individuals or certain people at the expense of the country . . . (business) is asking legitimate questions on the (regulations).”

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 that do not say where impoverished local Zimbabweans will get money to pay for stake in large mines and industries owned by foreigners are seen as a potentially fatal blow to efforts to woo foreign investors to help rebuild the country’s economy shattered by 10 years of political turmoil and acute recession.

Tsvangirai, acutely aware of the damage publication of the regulations has done to his campaign to woo investors back to Zimbabwe, quickly moved to calm the business community.

The Prime Minister declared the new rules a nullity because they were: “published without due process as detailed in the global political agreement (GPA) and the Constitution and they are therefore null and void”.

But Tsvangirai’s words are likely to be little reassurance to business leaders who are only too aware of how hardliners in Mugabe’s ZANU PF party who include Kasukuwere have brazenly ignored the GPA or power-sharing agreement to continue political violence and seizing white-owned private farms including some protected under bilateral agreements between Zimbabwe and other nations.