Tsvangirai pledges no nationalisation of business

HARARE – The proposed indigenisation legislation will not expropriate ownership in foreign mining firms, says Prime Minister Morgan Tsvangirai

“We are talking about existing business telling us how they intend to set thresholds, industry by industry, within a period of 10 years to bring the local indigenous people into the economy. There is nothing wrong in empowering citizens," Tsvangirai said.

The Chamber of Mines says the regulations gazetted last month essentially fast track indigenization, without taking into consideration the negative consequences on investment and growth. Foreigners regularly cite the law as their main concern about investing in Zimbabwe, which is desperate for external capital to rebuild an economy shattered by decades of chronic mismanagement and decline under President Robert Mugabe.

The law is silent on how payment for surrendered shareholding would be made, and observers have express concerns that the regulations would allow another land grab – this time of white-owned businesses.

But Tsvangirai said: "This is the ambiguity of the coalition. Really what I am explaining is that there is nothing wrong in a law that empowers the majority of citizens to be part of the economy. What is coming out is that this is another land reform. That is not the case. I want to say, and this is not just political rhetoric, the indigenisation regulations do not threaten existing or new business."

Mugabe has said the regulations would target foreign mining firms from countries that have imposed targeted measures against him and his henchmen and an arms embargo against Zimbabwe – to prevent him procuring armaments with which to further oppress Zimbabweans.

"That is rhetoric," Tsvangirai said. "There is no legal power for anyone to grab anything. There is no nationalisation or expropriation law in the country. This is not Rhodesia."

While initially there was an exemption of those mining firms with below a net asset value of $500,000, the regulations published recently by Indigenisation Minister Saviour Kasukuwere remove that exemption.

“I want to assure you there is no such thing,” said Tsvangirai. “Ask the minister, ‘where do you derive your power to go and take over or even to grab whatever you like?’”

He said that, while the goal was ultimately black Zimbabwean majority ownership, minimum thresholds would be implemented in the immediate future, with companies adopting much lower levels of black ownership than the stated 51%.