AS THE 43rd Zimbabwe International Trade Fair opened this week, the Zimbabwe government confirmed that its programme of company seizures was already under way.
Dubbed ”the second phase of economic liberation”, the new programme saw the launch of a full-scale investigation into the operations of the Chinhoyi-based gold mine Golden Kopje Mine by Minister of Mines and Energy Edward Chindori-Chininga.
The ministry, which accuses the mine of breaching the provisions of the Gold Trade Act by selling gold on the black market, is pushing for the seizure of the mine on grounds that penalties in the legislation have no deterrent effect. ”There is no going back on the programme. We are a serious government. We have to serve our economy, which is being sabotaged for political reasons,” said Labour Minister July Moyo.
The move follows threats made against business by President Robert Mugabe in 2000, and Zanu-PF politburo resolutions in January this year that gold, copper, asbestos and iron mines faced complete seizure or ”aggressive indigenisation” soon after the land redistribution exercise.
The programme is driven by a mixture of motives: the revival of companies that have closed, allegedly because of economic sabotage, and the transfer of businesses into black hands.
In the past five years Zimbabwean business has been hit by high interest rates, unavailability of foreign currency for imports and galloping inflation. The government remains reluctant to devalue the currency, while official price controls are a further pressure. About 700 companies closed their doors last year.
This week the government appeared to give some ground to the Confederation of Zimbabwean Industries, which has been pressing for a revision of price controls introduced last October. A government notice raised the price of a standard loaf of bread by just more than Z$15 to Z$60,44, and of a bottle of cooking oil by about Z$56 to Z$141,50.
Reacting to the government’s threats, Golden Kopje’s manager Gladman Musabeni said: ”We have pointed out that the viability of the mine depends on the gold sold at the parallel market rates. If we had not used this option, the mine would have closed down in mid-2001.”
Early this month the government released a list of 40 companies targeted for takeover. The list, mainly including companies involved in labour disputes or that have been closed or liquidated, was referred to the Ministry of Finance. The ministry is responsible for the disbursement of Z$2-billion set aside by the government for ”company revivals”.
The government says it will hand over the companies to workers who have come up with business proposals.
The list includes companies mostly owned by local Asian, white and black entrepreneurs. Moyo confirmed that the list reflected the situation as at December last year, but has been lengthened. It is understood that more Asian and British-owned companies have been included, because they are seen as more prone to ”economic sabotage”.
Chiyangwa, who is also president of the Zanu-PF indigenisation lobby, the Affirmative Action Group, has in the past five years been pushing for the seizure of Asian companies.
Asians, who account for about 1% of the Zimbabwean population of more than 11-million people, own many retail, property and manufacturing businesses. There are about 400 British companies in Zimbabwe.
Economists this week said the exercise was unwise, and that the government would be better advised to tackle the fundamental problems of hyperinflation, foreign currency starvation and the high interest rates. Inflation currently stands at 113%.
”Basic economics will tell you that the companies are not to blame,” said economist John Robertson. ”The culprit is the government, which clings to outdated economic policies like price controls. Once a company cannot make a profit or import spares and materials, it simply cannot operate.”
Economists said the exercise would defeat the purpose of initiatives like Zimtrade and the International Trade Fair, whose function was to sell Zimbabwe’s image and promote imports and exports. The trade fair has suffered a drop in the number of local and international participants in recent years.
This year’s annual event is ironically held under the theme ”Helping you secure new markets”. Only 15 foreign countries are represented, compared with 20 last year, and most are from African and Third World countries.
- Meanwhile, Andrew Meldrum reports from Harare, rural followers of Mugabe were accused this week of beheading a mother of eight who they suspected of being a supporter of Zimbabwe’s opposition party, the Movement for Democratic Change (MDC).
The woman was decapitated in front of her two daughters in the Magunje area of north-west Zimbabwe on Sunday. Brandina Tadyanemhandu (53) was the mother of MDC activist Tichaona Tadyanemhandu (20), who was killed by suspected Mugabe supporters in June 2000.
”They have killed my only son and now they have killed my wife,” said distraught Enos Tadyanemhandu (63). ”Why are they fighting us after they won the election? I will not be silenced. I will speak out against this evil.”
Police would not confirm the killing. Violence against the MDC has left 54 dead since January.