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Zimbabwe Moves To Calm Investors Over Corporate Indigenization Program


Political sources said the latest initiative was intended to bolster investor confidence after the publication of rules to put the controversial Indigenization and Empowerment Act of 2007 into practice

Facing widespread investor concern over indigenization of private enterprises in Zimbabwe, Harare has moved to solicit public comment and review regulations for the implementation of a law putting a controlling stake in large companies in the hands of black citizens.

Political sources said the latest initiative was intended to bolster investor confidence after the publication of rules to put the controversial Indigenization and Empowerment Act of 2007 into practice.

Economists and political analysts have dismissed the indigenization push as a bid by the ZANU-PF party of President Robert Mugabe to rally supporters ahead of possible national elections in 2011.

The regulations establish a mechanism for transferring a 51% controlling stake in all companies worth more than US$50,000 to indigenous blacks, though there may be some exceptions depending on the economic sector.

ZANU-PF Indigenization Minister Saviour Kasukuwere has sweeping powers under the regulations to determine who is eligible to become an indigenous partner of a white-owned enterprise and allocate share stakes. It is not clear how share transfers will be financed.

Prime Minister Morgan Tsvangirai told a symposium on public and private partnerships this week that the indigenization program aims to promote broader-based economic participation, not discourage investment.

"Sometimes investors get alarmed when a policy is announced without clarification, but I want to assure you that the policy is in the best interests of the people of Zimbabwe," Tsvangirai said.

He had earlier criticized the implementation regulations because the Cabinet had not approved them.

The Cabinet meanwhile has asked Parliament's Committee on the Budget, Finance and Investment Promotion to hold public hearings on the indigenization rules. Those began in Bulawayo on Friday and were to continue in Harare, the capital, on Monday.

Participants in Bulawayo told the committee that the rules will spark investor flight from Zimbabwe.

Sources in Mr. Tsvangirai’s formation of the Movement for Democratic Change told VOA that the oversight board appointed by Kasukuwere is partisan, and should be reconstituted on more of a consensus basis.

Kasukuwere denied in an interview with VOA Studio 7 reporter Blessing Zulu that the board is partisan - but added that he would not appoint a panel that would constantly be at loggerheads with him.

Political analyst Philip Pasirayi said that with elections on the horizon ZANU-PF is pushing indigenization for political reasons. "My concern is that there is no consensus on this indigenization law," he said, noting that few stakeholders were consulted.

So, "it raises eyebrows as to ZANU-PF's intentions in coming up with the indigenization law which we know is going to be used for political purposes." he said.

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