Foreign firms must comply or exit Zim
from MARCUS MUSHONGA in Harare, Zimbabwe
HARARE, (CAJ News) – FOREIGN-owned firms operating in Zimbabwe have until Thursday to comply with controversial indigenization regulations or lose their operating licences.
The companies have to cede 51 percent ownership to locals as part of the regulations government say are aimed at empowering the previously disadvantaged majority.
However, many targeted companies such as banks, retail, mining and manufacturing have expressed concern ahead of the Thursday deadline.
These include firms owned by neighbouring South Africa, Britain, Canada, China, Germany, South Korea and the United States (USA), among others.
South Africa has a major footprint in its northern neighbour.
South African-owned banking and retail firms in Zimbabwe include Nedbank (trading as Merchant Bank), BancABC, Blaclays Africa (Absa Bank), Pick & Pay, Spar, Shoprite, Spar and Standard Bank (trading as Stanbic).
In the mining and construction sectors, dominant companies include Group Five, Pretoria Portland Cement (PPC) and Stefanutti Stocks.
Britain, Zimbabwe’s colonial master until 1980, boasts a majority of companies in the Southern African country expected to cede 51 percent ownership in Barclays International, British Petroleum (BP), British American Tobacco (BAT), Standard Chartered Bank, Rio Tinto and Shell, among others.
Youth, Indigenisation and Economic Empowerment Minister, Patrick Zhuwao, has insisted these and other foreign companies doing business in Zimbabwe should comply and cede major stakes to locals.
“It’s either you (companies) comply or you close shop. Laws must be adhered to! We must never breed lawlessness as a nation,” said Zhuwawo.
“The failure to adhere to the laws of our land must attract immediate consequences that must be severe and dire enough to enough that the law is respected and adhered to,” added the minister.
Zimbabwe’s National Indigenisation and Economic Empowerment Board as well as the Zimbabwe Investment Authority (ZIA) have given the go ahead to parliament to take the 51 percent share ownership of foreign owned companies in the country.
The administration of President Robert Mugabe, in power since independence, appears undeterred by warnings such policies were scuttling direct foreign investment (DFI) in a country bedeviled by economic crises.
However, the country’s main opposition political party, Movement for Democratic Change (MDC), slammed the policies.
“It is tragedy that those superintending over this country (Zimbabwe) think it is alright to play Russian roulette with the country and its citizens’ economic welfare by chasing away foreign investors instead of embracing them,” MDC spokesman, Kurauone Chihwayi, said.
– CAJ News
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