Zimbabwe foreign firms face local control


Foreign-owned businesses operating in Zimbabwe, including banks and mines, will be forced to sell a majority stake to locals within the next five years under national regulations due to take effect in March.

But Prime Minister Morgan Tsvangirai said the rules, which are seen as a serious blow to efforts to lure foreign investors, were null and void because they were published without being reviewed by him or the cabinet.

The dispute reflects growing tension in the country’s year-old coalition government formed between Tsvangirai’s Movement for Democratic Change (MDC) and President Robert Mugabe’s ZANU-PF.

According to a copy of the regulations, seen by Reuters on Wednesday and first published last November, indigenous Zimbabweans should hold a controlling interest in foreign-owned businesses with asset values above $500,000.

Zimbabwe’s parliament in late 2007 passed an Indigenisation and Economic Empowerment Bill, which was signed into law by Mugabe in March 2008.

The formation of the unity government last February raised hopes among foreign investors that the law would be repealed.

“These regulations are framed with the general objective that every business of or above the prescribed value threshold must within the next five years … cede a controlling interest of not less than 51 percent of the shares of interest therein to indigenous Zimbabweans,” according to the regulations.

The regulations will come into effect on March 1.

SOURCED FROM REUTERS

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