Commercial Farmers' Union of Zimbabwe

Commercial Farmers' Union of Zimbabwe

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Zimbabwe gives banks 1 year to cede stakes to locals

Zimbabwe gives banks 1 year to cede stakes to locals

By Reagan Mashavave (AFP) – 9 hours ago

HARARE — Zimbabwe has given foreign-owned banks and other firms a year to 
cede a 51 percent stake to local black people, in compliance with equity and 
empowerment laws, a government notice said.

A notice in the government gazette, dating from Friday but made public on 
Tuesday, gave one year as a “maximum period a business may continue to 
operate before it attains the minimum indigenisation and empowerment quota.”

Prime Minister Morgan Tsvangirai however issued a statement describing the 
ultimatum as illegal and a threat to the ailing economy’s recovery 

Zimbabwe enacted in 2007 a law that forces all foreign-owned companies to 
hand over a majority stake of 51 percent to local blacks.

The law has led mining firms including the country’s biggest platinum mine 
Zimplats, which is a subsidiary of South Africa’s Impala, to turn in their 
schedules to cede majority shares to locals.

The latest notice originating from the office of Indigenous Minister Saviour 
Kasukuwere, has widened the targeted sectors to include banks, hotels, 
education institutions and telecommunications firms.

Britain’s Standard Chartered Bank and Barclays Bank are among the major 
foreign banks with operations in this former British colony.

Tsvangirai, President Robert Mugabe’s uneasy coalition government partner, 
dismissed the notice as “unlawful”.

“Government has not sanctioned the minister’s actions that are a threat to 
investment in the country,” Tsvangirai said in a statement.

The indigenisation drive is at the heart of a dispute between the two 

Mugabe who spearheaded the violent seizures of white-owned land in 2000, a 
policy that severely hurt the once vibrant agricultural sector, has 
threatened to take over foreign firms if they fail to meet the regulations.

“The Prime Minister wishes to inform foreign-owned banks, foreign-owned 
companies … and private educational institutions including creches, 
primary and secondary schools as well as institutions of higher learning 
that should anyone grab their assets, they would be doing so unlawfully.”

Tsvangirai said Zimbabwe should focus on job creation.

“The people of Zimbabwe want massive investment in the country and not 
self-serving political statements that have nothing to do with the 
collective position of government,” he said.

He said the law does not give Minister Kasukuwere powers “to act and to 
project an image of a voracious government keen to compulsorily grab almost 
all institutions and companies.”

Last year, Kasukuwere, a minister from Mugabe’s ZANU PF party said foreign 
banks had shown “disrespect” of the laws by failing to comply.

But Finance Minister Tendai Biti and central bank governor Gideon Gono are 
opposed to the laws affecting banks, saying the move would hurt the economy.

The regulations also aim at the tourism sector, targeting safari and cruise 
yatch operators.

Social clubs and sports associations are also listed alongside private 
schools and universities that will have to hand over their majority stakes 
to black Zimbabweans.

The law will see surrounding communities getting 10 percent, employees 31 
percent, while a government agency, the National Indigenisation and Economic 
Empowerment Board (NIEB) will walk away with 10 percent stake.

The government has not come out clear on how the shares will be transferred 
and if the new owners will buy the shares at market value.

The central bank chief has already warned that the laws should be applied to 
benefit the country’s poor and not just the rich elite.


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