Accessibility links

Mugabe Threatens Seizure of Foreign Firms Resisting Black Empowerment

  • Gibbs Dube

Zimbabwean President Robert Mugabe on Friday warned foreign-owned companies not willing to comply with the country’s black empowerment regulations, to leave or risk nationalization by the government.

Launching a community share ownership trust in Collen Bawn, some 130 kilometers south of Bulawayo, Mugabe said government will not tolerate excuses by companies resisting the indigenization law.

The policy has turned away potential investors and rattled the power-sharing government with the two formations of the Movement for Democratic Change saying it has far-reaching consequences.

Mr. Mugabe did not clarify how the foreign companies will be nationalized as the country’s constitution does not permit forcible seizure of private enterprises by the state.

Twenty mining companies including Blanket, Jersey and Fazik mines pooled their financial resources to set up the $10 million Gwanda Community Share Ownership Trust.

Several other such community trusts have been set up across the country in compliance with the black empowerment policy.

Mr. Mugabe said many Zimbabweans are suffering while foreign-owned companies are reaping huge profits from the nation’s abundant natural resources.

"We came here today to launch this program ... we will soon be back this time during elections and we hope you will vote for us, vote for indigenization, vote for your empowerment," he said.

The controversially-fashioned Indigenization and Economic Empowerment Act requires foreign firms operating in the country to transfer a 51 percent stake to local black investors.

Speaking at the same occasion, Local Government Minister Ignatius Chombo said time had come for Zimbabweans to be in charge of the economy.

Reacting to Mugabe’s threats, Investment Minister Tapiwa Mashakada told VOA Studio 7's Blessing Zulu that such pronouncements are discouraging foreign direct investment.