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03 Mar 2010 14:29
Zimbabwe’s Cabinet will review new local ownership rules that have sparked concern among business leaders, the industry minister said on Wednesday, saying the law had been published “prematurely”.
Zimbabwe published a law three weeks ago requiring that major foreign firms divest 51% stakes to locals. Banks and mining companies will be the most affected by the law, which gives five years to comply.
“Unfortunately those regulations were published prematurely,” Industry Minister Welshman Ncube told a meeting of business executives in the capital.
President Robert Mugabe, in power since independence in 1980, has defended the law as being necessary to end colonial-era inequities.
But Prime Minister Morgan Tsvangirai, the former opposition leader who joined the unity government one year ago, condemned the regulations—saying they were drafted behind his back and passed without his approval.
Ncube said that the Cabinet should have reviewed the law before it was published, but said the review was now taking place.
“It is now before the Cabinet committee on legislation and we have asked other ministers to make contributions,” he said.
The committee will then make recommendations to the government, which is sharply divided on the measure, with Tsvangirai’s Movement for Democratic Change arguing that the law will scare away foreign investment.
Victor Gapare, president of the Chamber of Mines, said foreign inflows had already been affected “because of perceived country risk”.
Confederation of Zimbabwe Industries president Kumbirai Katsande urged the government to tone down its rhetoric to avoid frightening potential investors.
“We have agreed with the minister to tone down on this sensitive issue,” Katsande said at the meeting.
“Indigenisation is here to stay, but it must be done in a manner which brings investment.”—Sapa-AFP
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