Government moves closer to take over of private companies

By Tererai Karimakwenda
June 11, 2007

More information has become available about the Indigenous Empowerment Bill the government is drafting, in its efforts to target all privately owned companies in Zimbabwe. And it appears the government is after much more than first expected. The Bill is reported to be in its final drafting stages by the Attorney General’s office and will be completed in the next two weeks for presentation to parliament by early July.

Essentially the Bill will require all foreign companies to sell 50% of their shares to locally owned firms or risk losing their license and registration. The companies must also ensure that half of their business is done with local companies and in return they will be given tax breaks and other economic incentives. The government itself will be required to procure 75% of its goods and services from locally owned companies and to deal only with indigenous banks and accounting firms.

Tendai Biti, secretary general of the Tsvangirai MDC, dismissed the Bill as a ZANU-PF ploy to acquire and vandalise private firms the way the party took over and destroyed agriculture. He said: “We have a corrupt regime being run by an 83-year old geriatric so simply changing the structure of those companies will make no difference.” Biti explained that black Empowerment in itself is not a bad policy but in this case it is ZANU-PF empowerment. He said: “You will find the same thieves living on those farms will be the same beneficiaries of this Bill.”

Biti added: “Black Empowerment is being done in South Africa, but differently. You will find they enacted the legislation within 10 years after independence. Ask ZANU-PF where were you for the last 27 years?” Biti believes investors will simply run away when this Bill goes through.

The government has been criticized for pursuing this policy after taking over agriculture and destroying it. Government cronies that took farms illegally during the so-called Land Reform Programme failed to produce for the nation and millions now face hunger. Biti said: “Six years after this Land Reform you will find we cannot produce 600,000 tonnes of grain. That programme was pure looting, pure asset stripping by ZANU-PF chefs.”

Top economists in the country have said the government takeover of private industry will mean the end for Zimbabwe’s economy. And with a majority in parliament, ZANU-PF will easily pass the Empowerment Bill into law.