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Zimbabwe puts foreign firms on 14-day notice - Daily Nation

Below is a piece from Daily Nation newspaper about Zimbabwe's indigenization law. The original story is available at http://bit.ly/naw1uU

 

By Kitsepile Nyathi

Zimbabwe has given 11 foreign-owned companies, including Britain’s Barclays and Standard Chartered banks, a two-week deadline to comply with its empowerment laws or face nationalisation.

President Robert Mugabe has targeted European and United States investments in the country for takeover as retaliation for the sanctions imposed on his family and close associates.

South African, Canadian and Australian mining firms are also among those given ultimatums.

Swiss-owned Nestle Zimbabwe, which in 2009 got into trouble after it refused to take milk deliveries from President Mugabe’s dairy farm, has also been targeted. The state-owned Herald newspaper on Friday said the letters delivered to the companies were dated July 28.

It said none of the companies had responded so far, quoting officials from the Youth Development, Indigenisation and Empowerment ministry.

Foreign companies had been given a May deadline to submit plans on how they intended to hand over 51 per cent of their stakes to Zimbabweans within five years. The government says licences of the companies that fail to comply will be withdrawn, leading to nationalisation.

Youth Development, Indigenisation and Empowerment minister Saviour Kasukuwere recently said 700 companies had submitted their empowerment proposals to the government.

He said 175 proposals from mining companies had been thrown out because the firms were only prepared to sell 26 per cent direct equity to Zimbabweans.

The companies said 51 per cent equity would be met through social credits.

There are fears the empowerment crusade will only benefit President Mugabe’s close associates just like his land reform programme where he targeted white-owned farms.

The land reform programme also led to the unprecedented collapse of Zimbabwe’s once vibrant economy with estimates now indicating that the farm seizures cost the country $12 billion in lost production over the last 10 years.

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