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25 Jun 2007 10:54
Zimbabwe’s Minister of Indigenisation and Empowerment, Paul Mangwana, has said the government will force foreign-owned mining firms in the country to cede controlling shareholding to indigenous Zimbabweans before the end of the year.
Addressing women in mining in the southern city of Masvingo at the weekend, Mangwana said the new Indigenisation and Economic Empowerment Bill, published by the government on Friday, will become law by August.
Mangwana said: “The government is concerned by the existing shareholding structure in most mining companies, hence we are going ahead with plans to take some shares from those companies that are wholly foreign-owned.
“We would want all foreign-owned mining companies to shed off at least 51% of shares to locals. The Indigenisation Bill would be ready by August and things will move before the end of the year.”
The proposed law seeks to ensure that at least 51% of shares in every public company or any other business are owned by indigenous Zimbabweans.
It describes an indigenous Zimbabwean as a person who was disadvantaged by “unfair discrimination on the grounds of his or her race” before the country’s independence from Britain. The majority blacks were disadvantaged by previous white-led governments until Zimbabwe’s 1980 independence.
Although speculation had been rife that the planned indigenisation law would lead to wholesale nationalisation of foreign-owned firms, the published Bill only proposes the creation of an empowerment fund that will provide financial assistance to indigenous Zimbabweans seeking to acquire shareholding in companies.
Once it comes into law, the Bill is set to affect mining giants firms such Zimplats, Anglo Zimbabwe, Halogen (formerly Falgold) and other large corporations operating in Zimbabwe that are entirely owned by foreigners.
Economic analysts have, however, warned that the law—which they likened to the government’s controversial seizure of white-owned farms to give to blacks—would scare away investors and decimate the country’s struggling industrial sector as control of large and sophisticated businesses is surrendered to blacks most of who do not have funds or skills to run them.—ZimOnline
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