Foreign firms in Zimbabwe are opting to protect their investments instead of fighting the new Zanu-PF indigenisation law.
Fearing a repeat of Zanu-PF's land-reform policy, more foreign-owned companies are expected to comply with the indigenisation law rather than engage in lengthy legal battles for seized assets should the party win the next election.
Zimplats, a subsidiary of South African mining firm Impala Platinum, signed a historic $971-million deal last week and agreed to transfer a controlling stake to the government and a 10% stake to local communities.
Saviour Kasukuwere, Zanu-PF's secretary for youth development and indigenisation, who is also Zimbabwe's indigenisation and empowerment minister, said Zimplats had set a precedent for all foreign-owned companies to follow.
Political observers have ruled out the likelihood of confrontation between the foreign-owned companies and Kasukuwere, and cite the Movement for Democratic Change's (MDC's) lack of clout in the unity government and the "fresh memories" of Zanu-PF's treatment of white commercial farmers during the farm invasions of 2000 as strong factors that will prompt more companies to sign up.
"Most of these companies have massive investments in Zimbabwe [and] they would rather protect them than be confrontational," said Charles Mangongera, a political analyst. "They saw how the white farmers were violently suppressed and they wouldn't risk having their investments decimated by challenging Zanu-PF."
Eric Bloch, a senior partner at the H&E Bloch consultancy, said the trend was not surprising. "What we are seeing now is a wave of forced compliance by the foreign-owned companies because the pressure to meet the indigenisation law is increasing," said Bloch.
An official in the indigenisation ministry said this week that the South African sugar giant, Tongaat Hulett, which is listed on the Johannesburg stock exchange, was expected to make an announcement on the indigenisation plan for its Zimbabwe unit, Hippo Valley, "any time this month".
Nestlé Zimbabwe, Innscor Africa and Fawcett Security are among the foreign-owned companies that have been issued with ultimatums to comply with the indigenisation law.
Mining and bank industries
In the mining sector, companies that have concluded their indigenisation deals include the Mimosa, Unki and Blanket mines, and Pretoria Portland Cement. In manufacturing, Schweppes Zimbabwe and British American Tobacco have signed deals, with Old Mutual and Ecobank Zimbabwe leading the way in the financial services sector. Hotel group Meikles Africa has also fulfilled the indigenisation requirements.
Kasukuwere has indicated that his focus is now on the banking sector.
"My full attention is now on the foreign banks. Tell them that Kasukuwere says that there is nothing special about them. The foreign banks are free to leave Zimbabwe if they do not want to comply with the empowerment laws. We now have the money and we will pay for their assets and ask them to leave," he said.
Observers say the upcoming poll is more a battle over economic policies than political ideologies and that Zanu-PF's belligerence will increase as it realises the tables have turned in its favour as a result of the Zimplats deal.
"Without a doubt, the economy is going to be a major issue in the next election, Mangongera said. "With unemployment levels officially hovering around 80%, both Zanu-PF and the MDC realise that they must have economic blueprints that appeal to the masses."
The MDC recently launched its jobs, upliftment, investment, capital and the environment manifesto, which undertakes to provide a million jobs in the next five years and grow a $100-billion economy by 2040. But observers warn that the MDC is fast losing ground against the indigenisation law.
The MDC spokesperson, Douglas Mwonzora, criticised the wave of indigenisation and accused Zanu-PF of using the proceeds to boost party coffers. "That is asset grabbing on the part of Zanu-PF. It does not increase national wealth. We know the proceeds of the Zimplats transaction will be abused. All funds must be held by the treasury," said Mwonzora.
78% say no to state takeovers
Zimbabweans do not approve of the government's indigenisation and economic empowerment policy, according to a survey.Results of a survey carried out by the Mass Public Opinion Institute on behalf of AfroBarometer show that even some in Zanu-PF do not approve of the indigenisation drive.The survey, titled Zimbabweans Prefer Empowerment via Jobs Rather than Business Takeovers, asked 2 500 Zimbabweans what they thought of the policy. "The common view held by the majority of respondents (78%) is that creating jobs is a far [more] effective way of empowering all Zimbabweans than taking over ownership of businesses (19%)," the survey found. "This view was widely shared by Zimbabweans in all 10 provinces, across the political divide [and] age and educational groups."The survey said that six out of 10 Zanu-PF supporters think empowerment should be done through job creation rather than taking over foreign-owned businesses. – Nkululeko Sibanda