It is not over yet. But to what extent we can hope for the change we really need, which is the repeal of the Indigenisation and Economic Empowerment Act, rather than mere amendments, has yet to be seen. Today, Thursday, a meeting of the Council of Ministers is to be held to discuss this topic. I have reproduced below an entry from the Prime Minister’s Newsletter, Edition 37, published on his website yesterday. You can download updates by calling up www.zimbabweprimeminister.org but I hope to be able to alert you to any helpful developments.
Kindest regards and best wishes,
Extract from the Prime Minister’s Newsletter, March 3 2010
The dispute between the main parties in the transitional Government over the recently gazetted indigenisation regulations is continuing and will be the only item for discussion in a special session of the Council of Ministers to be held tomorrow (Thursday, March 4).
The controversial regulations, which have already scared away millions of dollars in investment, threatening jobs and revenue generation, was gazetted as a Statutory Instrument by the Minister of Youth Development, Indigenisation and Empowerment without consultation on 12th February. The regulations have the effect of enforcing a law passed in Parliament in 2007 when Zanu PF was still the ruling party, that provides for heavy punishments, including jail, for international firms that refuse to cede majority shareholding to local people. The new legislation would be applied across businesses that are valued at more than $500 000.
Prime Minister Tsvangirai and President Mugabe on Monday agreed in a meeting that the regulations would not be enforced until they were brought to and approved by Cabinet, as per procedure. Finance Minister, Tendai Biti, said Cabinet was still seized with the matter, adding that “appropriate ministers will be making appropriate announcements in due course”.
However, the responsible Minister, Saviour Kasukuwere, a rich black empowerment proponent, has raised more discord by being widely quoted in the media, insisting that the regulations actually took effect from Monday March 1 2010.
All Movement for Democratic Change ministers and some in Zanu PF agree that the issue of empowerment needs to be discussed further to ensure that it does not affect the Prime Minister’s efforts to rebuild the economy.
Kasukuwere’s intransigence has caused consternation within
the transitional Government. Amid the uncertainty, some companies have liquidated holdings while others have held off new investments. Prime Minister Tsvangirai is worried that the regulations have renewed investor fears about the country’s shaky political situation and an unpredictable legal
environment that the transitional Government appeared to have stabilised.
Prime Minister Tsvangirai is on record as saying that indigenisation as currently proposed is “counter-productive”, and out of line with his mandate to deliver broad-¬based empowerment through economic growth.
“The regulations will achieve the exact opposite and this
is the reason why the Prime Minister continues to oppose
them in the strongest terms,” said James Maridadi, the Prime
Investors as well as members of Zimbabwe’s business community and labour have expressed concern that the regulations are designed to enrich a small elite at the cost of national empowerment, which can only be brought about through genuine wealth creation and expanding the national economy and affording Zimbabweans opportunities in business.
Business and analysts fear that members of resident Mugabe’s cronies could use this law to expropriate foreign-owned firms the same way they looted farms.
“The Prime Minister has always been a strong advocate of policies that empower the poor and the marginalised. But these regulations would plunge us back into the sort of economic decline and wide-¬scale job losses we saw as a result of corrupt farm acquisitions. The political elite that made millions from looting farms cannot be allowed to continue enriching themselves through grab strategies at the expense at the expense of the poor,” said Maridadi.