Zim targets Tongaat Hulett in indigenisation scheme
Zimbabwe has turned up the heat on its indigenisation programme and issued a 14-day ultimatum to Tongaat Hulett's unit in the country, Triangle.
The latest ultimatum issued by the National Indigenisation Economic and Empowerment Board comes a week after Indigenisation Minister Saviour Kasukuwere acquired shares under the community share ownership scheme from mining companies operating in Hwange. Coal giant Hwange Colliery is the largest mining company in the Hwange area to have been affected by the 51% indigenisation law as it was forced to cede shares to the community.
A part of the letter sent to Triangle by Zimbabwe's empowerment board said: "We request that Triangle submit a compliant plan to the ministry of indigenisation as soon as possible, and in any event, not later than 14 days from receipt of this letter ... ".
The board wants Triangle to comply with the indigenisation policy immediately by ceding shares to two schemes; to the company's employees and to the surrounding community where it carries out its operations. Triangle has been advised that "with respect to the creation of community ownership trust, the government position is that your business is involved in the exploitation of natural resources, including state land".
Economic observers have warned that the ultimatum could see Triangle halt plans to increase sugar production and was an indication that the indigenisation programme was spreading beyond the mining sector.
Economist Eric Bloch, a senior partner at H&E Bloch said; "This [the spread of indigenisation programme] is a natural occurrence as Zanu-PF prepares for the elections next year".
Impala Platinum's Zimbabwe operations were forced to give 51% of its shares to the government in March.
But reports circulated that the government didn't have enough money to pay for shares in companies in the country.
In March, empowerment board chairperson David Chapfika was quoted in local media as saying it urgently needed $6-million to help finance the purchase of shares offloaded by foreign companies under the controversial empowerment laws.
"We have been lobbying the finance ministry to give us the money to meet our requirements," Chapfika reportedly said.
Economists told the M&G that it was "no secret that the government is broke".
Kasukuwere has indicated that the indigenisation programme would target foreign-owned banks, which he accused of refusing to lend money to locals to finance start-up ventures. The empowerment law was promulgated in 2007 and has been condemned by political and economic observers and foreign investors who say that it bears the hallmarks of the country's land seizures of 2000.