By Alex Bell
29 October 2012
An ultimatum handed to sugar producing company Tongaat Hulett, to fall in line with Zimbabwe’s ‘empowerment orders’, is believed to be part of ZANU PF’s election campaign.
The South African sugar group was last week given a 14 day deadline to submit its plans to parcel out more than half of its shareholding, as part of the ZANU PF led indigenisation exercise. Tongaat Hulett’s sugar operations in Zimbabwe comprise the wholly owned Triangle Sugar operation as well as a 50.3% holding in Hippo Valley Estates.
In a letter dated October 23rd and addressed to Triangle, the Ministry of Indigenisation warned that it was losing patience with the sugar company and “should we not receive a proper compliant plan within the prescribed period, ministry and government would take it that shareholders of Triangle are not interested in continuing to do business in the country.”
The threats against Triangle follow numerous other incidents of ZANU PF entrenching its members and supporters in Masvingo province, with party members and officials behind the takeover of property and business ventures across the region.
It was reported more than a year ago that ZANU PF had started registering local party members and officials for the alleged allocation of sugar cane fields in the Triangle and Hippo Valley estates. Then in December last year ZANU PF aligned war vets took over two lodges that cater to fisherman, and a small game reserve on the Hippo Valley Estate.
Other ZANU PF officials have also recently been handed over hunting licences and 25 year land leases for properties in the Save Valley Conservancy, as part of what the party insists is ‘indigenisation’.
Economic analyst John Robertson told SW Radio Africa on Monday that “the only purpose (of the indigenisation plans) is to serve the forthcoming elections.”
“There is a huge amount of bluster and smoke and dust and mirrors being used to persuade people that will get something for nothing and they just have to vote for the right party,” Robertson said.
He added: “There is no other purpose for it. The indigenisation plans as they stand will be scrapped as soon as we settle up after an election, whatever happens. The plans will disappear because it is so discouraging to new investors. There will be no jobs without investment and no investment while indigenisation demands are made on investors.”
Robertson explained that, economically, the best way for the government to acquire shares in a stock exchange listed group like Hippo Valley, was to buy them on the stock market. But he said that the reason why the ZANU PF led indigenisation ministry is making such threats is because it doesn’t have the money to buy shares.
“It is unrealistic and unreasonable on part of the government. Nothing will improve in the management and function of the company in a change of ownership that is not paid for,” Robertson said.
He added: “There is no useful purpose served by threats and menacing statements. It will send messages out to any other investor that this is an extremely hostile investment climate.”