Zimbabwe To Unveil Local Ownership Rules This Month

The southern African nation introduced a law early this year saying 51 percent of firms worth over US$500,000 should be owned by black Zimbabweans but accepted that most sectors, especially the capital-intensive mining industry, will take time to get there.

Fourteen committees set up to determine minimum initial local ownership thresholds for various sectors had now finished their work, Saviour Kasukuwere, Minister of Youth Development, Indigenisation and Empowerment said.

“We will review them and publish them before the end of the month,” he told Reuters on the sidelines of an investment conference in South Africa’s commercial capital.

“We are moving. We need to bring about certainty. We can’t keep people hanging there.”

This year, Zimbabwe’s stock market has failed to build on the strong gains it posted immediately after the government scrapped the worthless Zimbabwean dollar in favour of U.S. dollars in February 2009.

The lacklustre performance — in contrast to other frontier African equity markets — has been widely blamed on concerns the indigenisation act was an attempt by cronies of President Robert Mugabe to get their hands on foreign-owned assets.

The uncertainty has also deterred the billions of dollars of foreign investment required to rebuild the economy after a decade of disastrous mismanagement under Mugabe’s Zanu (PF) administration.

Mugabe told Reuters in an interview in September that he would press ahead with plans to transfer control of foreign firms — including mines and banks — to local blacks.

Kasukuwere sought to allay those external fears, saying the bill was simply addressing the unresolved economic imbalances left by decades of white minority rule, and would ultimately create a stable and fair economy and society.

“This is not about nationalisation or expropriation of businesses. This act is to bring our people on board the economy,” he said.

“We accept foreign direct investment is critical in getting our economy to work. But it is necessary to balance foreign interests and the aspirations of our people.” Reuters