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Zim Plans To Take Over Foreign Banks

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Zim Plans To Take Over Foreign Banks

Harare, July 04, 2012 - Zimbabwe on Tuesday stepped up pressure on all foreign owned financial institutions that include banks to submit their plans to give 51 % shares to local nationals.

The latest threat on foreign firms, which was published in the current weekly government gazette, will also include the indigenisation of private schools, colleges and universities, hunting and Safari operators' companies, hotels, mobile cellular companies, advertising and broadcasting sectors.

"It is hereby notified that the Minister of Youth Development, Indigenisation and Empowerment has, in terms of section 5 (4) as read with section 5A (4) of the Indigenisation and Economic Empowerment Regulations,2010, prescribed with respect to the Finance, Tourism, Education and Sport, Arts, Entertainment and Culture, Engineering and Construction, Energy, Services, Telecommunications, Transport and Motor Industry sectors the appropriate minimum net asset value above which a business is required to comply with the principal regulations," the gazette reads.

The gazette, which was published by G. Magosvongwe, the acting secretary of the Ministry of Youth Development, Indigenisation and Empowerment, said all financial institutions, tourism companies, engineering and construction companies must be indigenised by July 2012.

The notice also says public and commercial airlines worth over $1 million must cede 51 % to locals.

Zimbabwe has foreign banks operating in the country that include British owned Standard Chartered Bank, Barclays bank and Stanbic bank.

In the services sector, the gazette lists that maintenance services, health care, security services, catering, freight and logistics business and franchising businesses must all be taken over by locals.

The Indigenisation and Economic Empowerment Act has been criticised by the Movement for Democratic Change (MDC) led by Prime Minister Morgan Tsvangirai that it seeks to enrich top officials from President Robert Mugabe's Zanu PF party.

Although the empowerment law was enacted years ago, the law is yet to be fully implemented as independent economic analysts have warned that this will drive away much needed foreign investment.

Tsvangirai on Tuesday denounced and described the move to take over banks as null and void.

"The Prime Minister would like to inform the public and the concerned stakeholders that there is no such government position because no such issue has been discussed and agreed upon by Cabinet. Government has not sanctioned the Minister’s (Saviour Kasukuwere) actions that are a threat to investment in the country," Tsvangirai said in a statement released by his spokesperson Luke Tamborinyoka.

"The Indigenisation and Economic Empowerment Act does not empower the Minister to act and to project an image of a voracious government keen to compulsorily grab almost all institutions and companies in the country. Section 21 (1) of the Act gives the Minister the mandate to make regulations to the Act. The Minister has not issued a Statutory Instrument but a Notice which in itself is unlawful and the contents of which are ultra vires the Act."

Tsvangirai said foreign banks and institutions in the country should ignore the notice by the Indigenisation ministry. He said no such policy was agreed by cabinet and that as the Prime Minister with executive powers on policy formulation and implementation he had never discussed or approved the purported government position captured in the public notice that was issued.
 
"The Prime Minister wishes to inform foreign-owned banks, foreign-owned companies in various sectors and private educational institutions including crèches, primary and secondary schools as well as institutions of higher learning that should anyone grab their assets, they would be doing so unlawfully and without the mandate of the Inclusive Government," he said.

"The national economic interests of Zimbabwe demand a proper policy that creates jobs for the millions of unemployed people in the country. 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."

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