At a time when Zimbabwe is looking for foreign direct investment (FDI), the rogue ZANU PF minister in the Inclusive Government is poised to scupper one of the largest investment deals in Zimbabwe since 1999.
Saviour Kasukuwere, the ZANU PF minister in charge of the Youth Development and Indigenisation ministry has confirmed that he is likely to stop the takeover of BP Shell assests in Zimbabwe by a South African company, Engen, which has a strategic partnership with a West African Oil company to buy up the assets.
BP and Shell, through its Zimbabwean registered company Pyramid Motor Corporation, has more than 75 Service Stations (Gas Stations) in the country and it is one of the largest oil companies operating in Zimbabwe.
Kasukuwere has stopped the deal, which was supposed to have been finalised by November 5, because he claims the investors have not "respected local laws and policies."
One of these laws and policies is the discredited investment law that requires foreign investors to hold a minority interest only in any company in Zimbabwe, with black Zimbabweans holding 51% shareholding.
Prime Minister Morgan Tsvangirai has already blasted the 51% requirement saying it is retrogressive.
What should be of concern to progressive Zimbabweans is the fact that the minister who now says he wants to enforce this policy, Minister Kasukuwere, is also a businessman in his own right, with interests in oil companies.
It raises the question of whether this enforcement is in the national interest or is designed to protect the minister’s own investments. Commentators in the industry accuse the Minister of trying to get rid of competition before it even starts?
This is the latest hurdle that Engen must overcome in order to realise its desire to get into the Zimbabwean market.
Engen and Kenyan oil group KenolKobil’s efforts to buy refined petroleum marketing assets in Zimbabwe gas were met with opposition as various groups with the assistance of the rogue cabinet Minister in Zimbabwe have alleged that the transaction was in violation of the country’s Indigenisation and Economic Empowerment Act.
Engen has denied the allegation.
In the latest development , the sources reported that Strausse Logistics, a Zimbabwean indigenous refined petroleum products marketing company, was standing in the way of the deal.
The main political figure behind Strausse Logistics is Ignatious Chombo, the Minister of Local government and his relative, the current Harare City Council Town Clerk Tenda Mahachi who is a former employee of BP and Shell’s Pyramid Motor Corporation.
Pyramid Motor coporation is a subsidiary of BP and Shell and it runs all of its service stations across the country. Mr Mahachi was the Managing Director for Pyramid between 1996 and 1999.
Strausse Logistics has filed a US$20m claim against BP as part of scare tactics. Reports said the liabilities related to fuel supply deals, negotiated by BP Zimbabwe’s senior management with indigenous importers after BP International decided to stop importing fuel into Zimbabwe.
Engen spokeswoman Tania Landsberg said the company was aware of the latest developments.
Employees of BP and Shell had indicated that they were willing to buy the company "as a going concern", but this has also posed problems.
The employees do not have the funds to purchase the assets of BP and Shell. Banks in Zimbabwe do not have the capacity to finance such a deal and foreign funding is hard to come by.
The fact that BP and Shell is selling to a foreign investor means that the locals have failed to raise the required capital.
The fear now is that, in the destructive tradition of ZANU PF, the minister may be trying to force this investor (BP Shell) to just give away their assets and company for nothing simply because there is a ZANU PF law that says locals should 51% of the company.
It is a move designed to destroy investor confidence, especially as it becomes clear that the Minister has a conflict of interest in the matter.
This is not a government initiative at all, as evidenced by the fact the Permanent Secretary in the Ministry is even too scared to comment on the matter, telling the media that the issue is being "handled by the Minister personally."
Kasukuwere, together with Mugabe’s nephew, Philip Chiyangwa, has been at the forefront of fighting for "local ownership" or "indigenisation" as it is called in Zimbabwe. They have built fortunes and empires on the back of political patronage using a group they founded called the Affirmative Action Group.
In years gone by, even banks were forced to give uncompetitive loans to some of the members of this organisation because of their political connections.
Already, State media has been briefed to start writing that the BP Shell/Engen deal is "unlikely to go ahead".
Until this group of politicians is kicked out on its ear, recovery in Zimbabwe is very much impossible. This case demonstrates more than anything else why it is correct to say that ZANU PF (and now the Inclusive Government) stand as impediments to the recovery of Zimbabwe