Business executives have described as scaring Zimbabwe's threat to shutdown foreign-owned companies that did not meet Thursday's deadline to transfer majority stakes to local people.
The country threatened to shut down the companies Friday if they did not comply with the black economic empowerment program.
lndigenization Minister Patrick Zhuwao has been breathing fire over some companies failing to comply with the black economic empowerment law, which forces those valued at more than $500,000 to transfer 51 percent shares to locals.
The minister now says it is a bit difficult for a nation to shutdown companies that are registered abroad. He is now proposing to re-engage company executives through line ministries that are expected to submit indigenization plans to his ministry about progress in complying with the law.
Executives, who spoke to Studio 7, said threats being made by the government to shut down their companies if they do not follow the law are counterproductive as Zimbabwe is currently attempting to court international finance institutions to give it loans for resuscitating the ailing economy.
Self-confessed President Robert Mugabe supporter, Reverend Obadiah Msindo, who is also director of Destiny for Africa Network, said the government is getting it all wrong.
“I do not fully agree with the idea of closure of companies on April 1 2016. I would advise the Minister of Indigenisation Patrick Zhuwawo to use a different approach given the situation we are in … of high unemployment. If it is a cabinet decision then cabinet has to review this decision. Surely we cannot temper with the few companies that are in existence.
Msindo’s views were echoed by John Mufukare, executive director of the Employers’ Confederation of Zimbabwe. He said most company executives are currently in a state shock.
“It gets to the point where people are just in a state of shock but there is not too much panic. People have taken the attitude that what will be, will be. If we are going to be closed down let it happen. People have become passive.”
Mufukare said implementing an indigenization compliance deadline is disastrous for Zimbabwe, adding that government should not have aborted and engagement process with companies.
Ben Freeth, a member of the Commercial Farmers Union of Zimbabwe, said it was possible that Zimbabwe would take the drastic measures to shut down the companies that have failed to comply as has been the case on white commercial farms since 2000.
However, Dr. Shingi Munyeza, a businessman, said indications are that a lot of companies have submitted their plans to the National Indigenisation and Economic Empowerment Board. He believes the process is not retrogressive.
On Wednesday, Zhuwawo told an indigenisation workshop in Harare that all companies that have not complied with the law risk being shut down. Zhuwao said any job losses would be blamed on what he called "irresponsible" directors who fail to follow the country's black economic empowerment program.
The Zimbabwe Investment Authority could not be reached for comment. Reports says at least 35 companies have so far submitted their indigenization plans following threats by the government to forcibly shut down non-complying firms.