Accessibility links

Zimbabwe Cabinet Defers Debate on Indigenization, But Revisions Said to Proceed

  • Gibbs Dube

The business community and the MDC have proposed that the requirement for a 51 percent indigenous stake in all companies be replaced with a level of participation determined on a sector by sector basis

The Zimbabwean Cabinet on Wednesday put off discussion of the controversial indigenization program for a week as it became clear that President Robert Mugabe's ZANU-PF and the Movement for Democratic Change of Prime Minister Morgan Tsvangirai remain divided over implementation of black empowerment legislation.

Sources informed on the session said ministers were being given time to consult further before opening debate on the potentially divisive economic issue which has major political implications.

Despite the Cabinet stalemate, sources said indigenization regulations are to be revised such that companies will sell shares to black Zimbabwean investors rather than ceding them as indicated in previously gazetted regulations.

The business community and the MDC have proposed that the requirement for a 51 percent indigenous stake in all companies be replaced with a level of participation determined on a sector by sector basis.

Sources said the government is likely to adopt such guidelines. But a ZANU-PF proposal to impose a levy on companies to fund indigenous acquisition of equity is creating further divisions, they said.

Chamber of Mines President Victor Gapare said Wednesday that the sector believes a 15 percent stake for indigenous investors is the maximum level of equity transfer that is acceptable.

Gapare said that in lieu of transferring a 51 percent stake to indigenous investors by whatever means, mining concerns will expand community programs including the construction of schools and hospitals.

Parliamentary Legal Committee Chairman Obert Gutu told VOA Studio 7 reporter Gibbs Dube that it is likely to take will take time for new indigenization regulations to be agreed upon and published as ZANU-PF sees the black empowerment program as a potent campaign issue in the next general election, not yet scheduled.

“They are using the whole black empowerment concept in preparation for the forthcoming election and I do not see ZANU-PF relenting to the extent of wanting to withdraw the regulations,” Gutu said.

Employers Confederation of Zimbabwe Chief Executive Officer John Mufukari told reporter Blessing Zulu that his group would welcome revised indigenization regulations.

XS
SM
MD
LG