President Robert Mugabe renewed threats to seize foreign mining interests and businesses accused of profiteering, state radio reported on Tuesday. But the head of the central bank warned against hasty and disruptive seizures in a country in economic crisis.
Mugabe and Reserve Bank Governor Gideon Gono, until recently seen as a rising political force, appeared at odds after Gono criticised new legislation to force white people and foreign businesses, including international banks, to hand over a 51% controlling stake to black Zimbabweans.
In a fiscal policy review statement on Monday, Gono said ”excitable, overnight changes” in policies could lead to unintended production disruptions, business closures and worsening shortages and could be exploited by favoured cliques and cronies.
As the banker spoke of the need to ”return our dogs to the kennels” on Monday, Mugabe returned home from a trip to the United Nations General Assembly in New York to what the state media called ”a thunderous hero’s welcome” at the Harare Airport.
The state media gave prominence to Mugabe’s homecoming and unusually brief coverage of Gono’s quarterly fiscal review.
Mugabe told thousands of ruling party militants bussed to the airport that businesses that abused government price cuts enforced since June 26 would not be tolerated.
”We will have to seize the companies,” Mugabe said in a recording broadcast by state radio on Tuesday.
Since the June edict ordering all prices slashed by about half, cornmeal, meat, bread and most staples have disappeared from the stores, fuelling a thriving black market in scarce goods. Gasoline shortages and the pegging of commuter fares have crippled transport services.
Mugabe said some goods reappeared at exorbitant prices and businesses would not be allowed to continue ”fleecing consumers”.
Under the new Indigenisation and Economic Empowerment Bill that Mugabe has still to sign into law, Zimbabweans will take over 51% of all mining concerns. Mugabe said investors in mines who were unwilling to abide by the law should ”ship out”, the official media reported.
”The minerals are ours. We are offering partners a share of 49% … If they won’t take it, hard luck, we will give it to our people,” he said.
Gono on Monday said: ”We must avoid grab, take all and run … foreign investors must be given a reasonable degree of flexibility.”
Plans to ”muscle in” on successful mining companies and take over majority control of international banks needed to be handled with extreme caution, Gono said. Profitable mines were a key source of hard currency.
Gono said he advised the government not to ”forcibly push the envelope of indigenisation in the area of finance and banking. In whatever we do, we must guard against measures premised on emotion rather than sense. Capital is a very timid commodity. It will jump ship.”
The government’s price cuts were meant to tame the world’s highest official inflation of about 6 600%. Independent estimates put real inflation closer to 25 000 % and the International Monetary Fund has forecast it reaching 100 000 % by the end of the year.
Gono called the blanket price cuts irrational and a threat to business viability.
He cited the slashing of fares forced on the state airline, Air Zimbabwe, in June that made it cheaper to fly 2 000km to Johannesburg in neighbouring South Africa than to buy scarce gasoline and drive 200km from Harare to the central Zimbabwe town of Kwekwe.
Gono said a taxi from Victoria Falls airport to the resort town cost more than a flight there from Johannesburg.
”Such irrational measures cannot be sustained in our economic turnaround efforts,” he said. — Sapa-AP