Tsvangirai dismisses draconian indigenisation bill

By Alex Bell

10 February 2010

Prime Minister Morgan Tsvangirai has dismissed a draconian indigenisation bill, published on Tuesday, declaring the 51% black ownership regulations ‘null and void.’

The Indigenisation and Economic Empowerment regulations, passed under a two year old legislation adopted by the ZANU PF government, requires businesses to inform the government of the racial make-up of their shareholders by mid-April. From there, the unity government would determine how much of their shareholding would need to be ceded to ‘indigenous’ Zimbabweans. The government would make this choice from a pre-decided list of ‘suitable’ indigenous shareholders, and business owners could face jail time if they don’t comply.

But the Prime Minister and MDC leader on Tuesday immediately dismissed the bill as being of no force, sar ‘were gazetted without consultation’ of the unity government. The Prime Minister, who is responsible for the formulation of all Government policy by Cabinet and the implementation of them, said that neither he nor Cabinet had reviewed the regulations before they were gazetted. “They were published without due process as detailed in the Global Political Agreement (GPA) and the Constitution and they are therefore null and void,” the Prime Minister said.

The Regulations were published by the Minister of Youth Development, Indigenisation and Empowerment, Saviour Kasukuwere and were due to come into force on 1 March 2010. A maximum penalty of five years in jail faces any business owner that misses the mid-April deadline to declare the racial composition of their companies to the government. The same penalty awaits whites employers who use black employees as ‘fronts,’ while Minister Kasukuwere will keep a list of ‘suitable candidates’ pre-approved by the government as indigenous shareholders.

Tsvangirai’s spokesman James Maridadi said the Prime Minister “totally disowns the bill,” arguing it doesn’t reflect the beliefs and wishes of the unity government. Maridadi explained that while the Prime Minister is not against indigenisation policies, he does not support any policy that has the potential to scare away investors.

“There is need for a balance of policies, between attracting investors and supporting indigenisation. But this bill does not have that balance,” Maridadi explained.

Businesses with assets of more than US$500 000 would be affected by the law, which many believed had been shelved after the ZANU PF government proposed and drafted it in 2008. Multinational mining companies, like South Africa’s Impala Platinum and Rio Tinto, are seen as most at risk of such ‘indigenisation’ plans. Last week, Rio Tinto diamonds and minerals chief executive Harry Kenyon-Slaney, said that “the only threat to our operations are indigenisation programmes.” Such a bill would also further hamper efforts to encourage foreign investment in the country, efforts already undermined by the ongoing seizure of commercial land under the guise of land ‘reform.’

Economic analyst John Robertson said the bill would see a “massive down-turn in investment,” arguing that “potential donors would prefer to place their money elsewhere.” He explained that this bill has nothing to do with empowerment of the people, but more to do with ‘disempowering’ the business sector. Some observers have argued that this law, targeting businesses, is an extension of the land grab campaign, a political weapon Robert Mugabe has used over the years to secure voter support. It is being widely speculated that the list of ‘suitable candidates’ for indigenous shareholding under the law will be a list of cronies and supporters loyal to the Mugabe regime. Such a list would likely mirror the list of mainly well-connected beneficiaries of the land grab campaign, which has seen ZANU PF loyalists secure multiple pieces of farm land.

Robertson echoed these sentiments saying those who “support the government’s policies will be rewarded.”

“This bill will achieve disempowerment by taking businesses away from people who do not support the government and giving power to those who do,” Robertson said.