Zimbabwe says it will pay for foreign firms
Thu Jul 7, 2011 8:14pm GMT
* Destitute country doesn’t have funds for plans, analysts
* Foreign investors losing confidence
By MacDonald Dzirutwe
HARARE, July 7 (Reuters) – Foreign companies in Zimbabwe will not be seized
but bought out under a black economic empowerment scheme sponsored by
President Robert Mugabe’s ZANU-PF party, a government minister said on
Thursday.
However, destitute Zimbabwe, the world’s second-largest platinum producer,
does not have enough money to purchase majority stakes in the foreign firms
and could be trying to ease the concerns of overseas investors, analysts
said.
Speaking at the launch of a five-year economic development plan, Economic
Planning and Investment Promotion Minister Tapiwa Mashakada said the drive
would take time and would not destroy the country’s fragile economy.
“Indigenisation and empowerment need not be the elephant in the room,” said
Mashakada, a senior member of Prime Minister Morgan Tsvangirai’s rival
Movement for Democratic Change (MDC) which joined ZANU-PF in a unity
government over two years ago.
“It is there to make sure the majority of our people are broadly empowered.
The 51 percent is not going to be expropriated. It’s going to be funded and
there’s going to be a time frame for that,” he said.
Mugabe, 87 and in power since Zimbabwe’s since independence from Britain in
1980, signed the Indigenisation and Economic Empowerment Act in 2008, which
forces foreign-owned companies worth over $500,000 to achieve at least 51
percent black ownership within five years.
Analysts say Mugabe’s drive targeting firms in all sectors, including
banking and mining, is scaring potential investors in the resource-rich
southern African country struggling to recover from a decade-long recession
many blame on ZANU-PF policies.
Mugabe’s seizures of white-owned commercial farms about a decade ago under
the banner of correcting colonial injustices sparked a loss of overseas
confidence in investing in the state and an economic downfall.
The government has threatened to start the plan by taking over 51 percent
stakes in foreign mines from September.