News / National
Mugabe stands firm on empowerment and indigenisation
07 Sep 2011 at 06:31hrs | Views
President Robert Mugabe said on Tuesday he expected the full cooperation of foreign firms in a plan for local blacks to take controlling stakes in their business operations in the country.
He also said in the speech to parliament that foreign investment was safe in the southern African country, which has been shunned by investors due to the plan to force foreign companies to turn over shares, as well as suspected human rights violations.
"I wish to assure investors that their investments in the country remain safe and to urge them to maintain compliance with the country's laws," Mugabe said when opening the session of parliament.
Mugabe signed the economic empowerment law in 2008 that forces foreign firms - including mines and banks - to surrender at least 51% shares in their operations to local blacks. It has yet to be implemented.
Analysts see the threat as a way to squeeze more funds out of the companies tying to build operations in the country with the world's second biggest platinum reserves after South Africa.
There is not enough capital in destitute Zimbabwe to buy controlling stakes in the foreign firms and not enough expertise to run them.
In March, Youth Empowerment and Indigenisation Minister Savior Kasukuwere called the foreign firms to submit plans on how they intended to dispose of majority stakes by the end of that month.
Kasukuwere last month gave mining firms a 14 day ultimatum to submit fresh plans. Analysts say the government is trying to force each company to negotiate on a case-by-case basis and build up funds to fight elections planned for next year.
He also said in the speech to parliament that foreign investment was safe in the southern African country, which has been shunned by investors due to the plan to force foreign companies to turn over shares, as well as suspected human rights violations.
"I wish to assure investors that their investments in the country remain safe and to urge them to maintain compliance with the country's laws," Mugabe said when opening the session of parliament.
Mugabe signed the economic empowerment law in 2008 that forces foreign firms - including mines and banks - to surrender at least 51% shares in their operations to local blacks. It has yet to be implemented.
There is not enough capital in destitute Zimbabwe to buy controlling stakes in the foreign firms and not enough expertise to run them.
In March, Youth Empowerment and Indigenisation Minister Savior Kasukuwere called the foreign firms to submit plans on how they intended to dispose of majority stakes by the end of that month.
Kasukuwere last month gave mining firms a 14 day ultimatum to submit fresh plans. Analysts say the government is trying to force each company to negotiate on a case-by-case basis and build up funds to fight elections planned for next year.
Source - Byo24News
