Threats against foreign firms 'fascist'

HARARE - Thousands will be jobless if government goes ahead with its Indigenisation and Empowerment Act directive, economic experts have warned.

This follows Wednesday’s announcement by Indigenisation minister Patrick Zhuwao that all foreign-owned companies face closure unless they sell or give up 51 percent of their shares to black Zimbabweans by April 1.

Former Finance minister Tendai Biti yesterday described the directive as “fascist”.

He said the move had dire consequences for the jobless men and women on the streets.

He added that the move was an attempt by government to create an illusion of reform necessitated by the worsening financial woes facing government, which is failing to raise enough salaries for its bloated workforce.

“It’s a reflection of a government that is desperate, that is at war with itself,” Biti told the Daily News on Sunday yesterday.

“We are already in an economic recession characterised by deflation, weak aggregate demand, deindustrialisation and massive job losses.”

Zanu PF won the 2013 election on the back of an ambitious promise of creating 2,2 million jobs but that still remains a pipedream.

Experts feel the provisions the Indigenisation and Empowerment Act can only spell doom.

“We are desperate for foreign investment. This entire fascist move to close so-called non-complaint companies confirms that Zimbabwe has become a pariah state. And until Zanu PF reforms, we are not going anywhere,” Biti said.

Economic expert Eddie Cross said the Indigenisation and Empowerment Act had failed to yield results in the past, proof that this directive will have little or no benefit for the country’s economic woes.

“If you are fishing in a river and you are not attracting any fish it’s not that there are no investors in the river, it’s not that people don’t want your platinum, but it’s because your bait is wrong,” Cross said.

“Whether you are in favour of indigenisation, empowerment, you simply got to answer the question, why is it not attracting investors?

“The answer is simple. Who is going to invest $100 and be left with $49 and no control of the business? You need to be crazy and there are not many crazy business people out there,” he said.

Economic analyst Vince Musewe said Mugabe’s endorsement of the directive is a slap in the face of the IMF re-engagement efforts which recently approved Zimbabwe’s efforts towards normalising its relations with various international creditors.

“Any effort towards re-engaging with Zimbabwe must be based on clear deliverables on the key areas of reform which for one is repealing of the Indigenisation and Empowerment Act in its totality as it is just a haven to promote and sustain Zanu PF’s patronage and corruption while chasing away crucial investments into the economy,” he said.

Zhuwao has warned defiant companies they would face the full wrath of the law if they contemptuously continued to show disregard for Mugabe and the country’s laws.

“It is March 23, 2016, three months into 2016, and businesses have continued to disregard Zimbabwe’s indigenisation laws, as if daring the president and government to do something about their contemptuous behaviour,” he said.

“The failure to adhere to the laws of our land must attract immediate consequences that must be severe and dire enough to ensure that the law is respected and adhered to.”


Comments (8)

I wish I could take out...permanently, idiots like Zhuwao and the like!!! How on earth do you expect those with money to invest $1.00 in your small economy and then remain only with $0.49??? What's the point. Is this stupid minister referring to currently operating companies or any other invest wishing to do business in a banana republic of Zimbabwe!!!! F%$#k your country , there are many other investor friendly countries in the world. Idiot Zghuwao

gamuchirayi - 27 March 2016

Obviously this government has no idea of the compounding effects negative growth has on an economy. Each time the paranoid ZANU-PF govt runs a foreign company out of the country, our economy declines more. ZANU-PF has managed to provide us with 30 years of negative growth, and the impact of each percentage decline is greater than each percent increase. This is massive, massive economic damage. Let's not waste time blaming ZANU-PF - let's look for political leadership that will build our economy, give our kids jobs, and give all of us schools, hospitals and roads.

david taylor - 27 March 2016

Zhuwao is not Zimbabwean like his uncle their mission is to destroy Zimbabwe FACT then they can return to Mozambique and Malawi respectively

Gabarinocheka - 27 March 2016

@gabaricocheka,cut your xenophobic nonsense and deal with issues here,if you have no contribution to make shut up,you are against indigenisation because you put too much emphasis into whites and their defectively drawn up borders,you are probably not one of the san tribe so maybe you can be the first one to return to where your forefathers came came from,most likely the great lakes region

truth - 27 March 2016

I forgot to mention "truth" in my petition to God. Truth does not make a positive contribution to the debate just like he is telling a contributor who is stating public knowledge about who is destroying Zimbabwe? China is giving the UK 33BUSD, why can't they give us 15BUSD only? Why was that amount stolen from us?

Okech - 27 March 2016


ZIDANE - 29 March 2016


ZIDANE - 29 March 2016

@zidane. Indiginisation is not wrong but what is wrong is to expect an investor to make an investment which they have no control over. In many countries the maximum thresh-hold is that the locals hold not more than 40%. Put aside the political rhetoric and put on the shoes of the investor. Would you want to make significant investment in a business which you don't control. In many businesses return on investment is well over 10 or even 20 years.

MT - 30 March 2016

Post a comment

Readers are kindly requested to refrain from using abusive, vulgar, racist, tribalistic, sexist, discriminatory and hurtful language when posting their comments on the Daily News website.
Those who transgress this civilised etiquette will be barred from contributing to our online discussions.
- Editor

Your email address will not be shared.
Enter the three characters from the image on the right. This helps prevent automated 'bots' from submitting spam to the site. This field is NOT case-sensitive. If the characters are a bit hard to see, try refreshing the code by clicking the image.