ZIMBABWE will strengthen and clarify a law compelling foreign companies to cede 51% of local assets to black Zimbabweans or the government in a bid to win investment, Justice minister Patrick Chinamasa said.
President Robert Mugabe’s Zanu PF party, which won July 31 elections, will also close any “loopholes” in the law, he said in an interview in Harare, the capital, today.
“I would want to see clarity on the rules of the game so they can decide to come or stay home” he said in reference to investors. “We need to engage with the investors. Let’s be clear so there is no equivocation.”
Mugabe’s government plans to seize control of foreign-owned mines without paying for them, while compensating owners for a majority stake in banks operating in Zimbabwe, Saviour Kasukuwere, Minister of Youth Development, Indigenisation and Empowerment said yesterday.
Zimbabwe is seeking investment in the power industry, Chinamasa said.
The ruling party will also make minor changes to the Constitution having won the two-thirds legislative majority it needs to do so, Chinamasa said. Citizenship laws won’t be altered while security reform will be halted, he said.
Meanwhile the soon to-be-formed Zanu PF government is most likely going to come up with a slightly more relaxed indigenisation policy, a financial analyst John Robertson has said.
“I have heard them speaking of a five-year horizon they might give companies 30 years to make sure the change takes place,” he told
“The changes in shares and who owns the shares doesn’t actually make a difference to the productive capacity of a country.
“What we need is a climate within which people are prepared to start new companies, where people are prepared to invest extensively.”
He says such a move could boost investor confidence and unlock the much-needed financial support from international lending instituitions like the World Bank and International Monetary Fund.
Zimbabwe’s industrial index took an 11% dip and the mining index lost 2% on Monday, the first day of trading after Rober Mugabe won the July 31 elections.
Robertson says the economic situation may remain depressed until the incoming government makes a more concrete pronouncement on its policies.
The election is being disputed with the opposition MDC saying it is going to challenge the poll outcome in court. Mugabe is likely to be sworn in once the court challenge is cleared.