The regulations promulgated under the Indigenization and Economic Empowerment Act of 2008 say that by mid-April all businesses must give the government details on the racial composition of their shareholdings
Sandra Nyaira Washington 09 February 2010
The Zimbabwean government has published regulations for implementation of a controversial 2008 law obliging white-owned companies to put a majority of their shares in the hands of indigenous Zimbabwean blacks, calling for completion of the cession of control within five years.
The regulations promulgated under the Indigenization and Economic Empowerment Act of 2008 say that by mid-April all businesses must give the government details on the racial composition of their shareholdings.
Based on that the government would determine what stake in the enterprise must be ceded to indigenous Zimbabweans, based on a list of candidates maintained by the Indigenization Minister Saviour Kasukuwere. Managers missing the deadline could face penalties of up to five-years in jail.
Harare economist John Robertson said the publication of the regulations in the official gazette will stop new foreign investment dead in its tracks.
Soon after publication of the regulations, the office of Prime Minister Morgan Tsvangirai issued a press statement saying they were null and void because the rules were published without discussion or authorization by the Cabinet.
The promulgation of the regulations comes on the heels of a speech by Mr. Tsvangirai at the World Economic Forum in Davos, Switzerland, calling for international investors to consider putting their money in Zimbabwe.
Despite the passage of the legislation in 2008, the government had done little since then to signal if it were intent on enforcing the act, and Mr. Tsvangirai's side of the power sharing government had signaled very clearly that moves in this direction would undercut its efforts to revive the economy.
In a statement, Mr. Tsvangirai said that, "I am in charge of all policy formation in Cabinet and neither myself nor the Cabinet were shown these regulations before they were gazetted." The regulations "were published without due process as detailed in the Constitution and are therefore null and void."
Tsvangirai spokesman James Maridadi told VOA: "We are trying to come up with policies that attract investment into the country and the thrust is to portray Zimbabwe as a safe destination for investment. This is counter-productive, it is old thinking."
Maridadi said Mr. Tsvangirai would meet with President Robert Mugabe on the indigenization question, and has also summoned Indigenisation and Empowerment Minister Saviour Kusukuwere for an explanation.
Despite the prime minister's opposition, Economic Planning Minister Elton Mangoma, a member of Mr. Tsvangirai's MDC formation, told VOA Studio 7 reporter Sandra Nyaira that the business community is misinterpreting the regulations which will not affect quest for international capital