Friday, March 12, 2010

(NEWZIMBABWE) Tsvangirai U-turn on indigenisation

Tsvangirai U-turn on indigenisation
by
12/03/2010 00:00:00

PRIME Minister Morgan Tsvangirai has launched a surprise defence of Zimbabwe’s indigenisation laws, just weeks after calling them “null and void”.

Backpedalling from his earlier position on the controversial law which requires foreign-owned firms to cede majority shareholding to locals, Tsvangirai told a symposium in Harare that the policy was “in the best interests of the people of Zimbabwe”.

"I want to assure you that there is no intention on the part of the government to undermine investment, but to promote broad-based indigenisation and empowerment,” Tsvangirai was quoted as saying at a conference on public-private enterprise partnerships on Thursday.

He added: "Sometimes investors get alarmed when a policy is announced without clarification, but I want to assure you that the policy is in the best interests of the people of Zimbabwe.

"The policy intends to enhance local participation and, of course, not the enrichment of a few people.”

Tsvangirai furiously hit out when the government published statutory regulations of the Indigenisation and Economic Empowerment Act 2008 last month, saying he had not been consulted.

The regulations, which took effect on March 1, compel foreign-owned firms with assets of over US$500,000 to draw up plans of ceding 51 percent shareholding to “indigenous Zimbabweans” by May.
These companies then have five years to conform with the law.

On February 2, Tsvangirai declared: “I am in charge of all policy formation in the cabinet and neither myself nor the cabinet were shown these regulations before they were gazetted.

“They were published without due process detailed in the constitution and are therefore null and void.”

President Mugabe later vowed there would be no retreat. "This law will enable us to examine every large company in the country and determine whether the ownership principle has been observed," Mugabe said. "If not, then 51 percent must come to our people."

The new law could affect companies including Anglo Platinum, Impala Platinum and Aquarius Platinum, three of the world’s four biggest producers of the metal, which all own mines in the country. Old Mutual, Africa’s biggest insurer, owns properties and an insurance operation in the country. Bank operations include Barclays and Stanbic.

Tsvangirai told the conference in Harare on Thursday that there were negotiations still ongoing in government around how to spread benefits to a broad base of Zimbabweans, but not repealing the law.

He said: “We are negotiating, discussing and not with the intention of getting rid of the Indigenisation Act, but how we can create an environment that allows local participation."

The Prime Minister’s U-turn will create confusion among his supporters, with most of his MDC party’s ministers in the power sharing government with Mugabe’s Zanu PF taking the line that the new measures will drive away potential investors.

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