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Black Empowerment Drive Becomes Another Source of Division in Zimbabwe Government

  • Gibbs Dube

Political sources said that although the MDC formation led by Mr. Tsvangirai successfully urged the Cabinet to suspend the regulations, Mr. Mugabe's ZANU-PF was digging in for fear that indigenization could be derailed

Zimbabwean President Robert Mugabe on Wednesday stepped into the debate over implementing legislation for the so-called indigenization of larger companies, saying controversial regulations to put a controlling interest in such firms in black hands have not been suspended as announced Tuesday by Cabinet officials.

President Mugabe told journalists that reports that the regulations had been nullified in the Cabinet's Tuesday meeting were “completely false,” saying ministers are examining them to make improvements.

A spokesman for Prime Minister Morgan Tsvangirai, James Maridadi, told Reuters on Tuesday: "The cabinet has today declared those regulations null and void, and they are being suspended to allow for broad-based consultations on the best way to proceed."

Although Mr. Tsvangirai's Movement for Democratic Change endorses indigenization or black empowerment in principle, party officials have expressed concern at the indigenization regulations promulgated last month by Indigenization Minister Saviour Kasukuwere without prior consultation within the Cabinet. Mr. Tsvangirai told business leaders last week that the rules would be revised to ensure that international investors didn't write off Zimbabwe as a destination for capital.

Kasukuwere told VOA Wednesday that the regulations remained in place and indigenization would continue to move ahead. Companies with assets of more than a half million U.S. dollars faced a deadline Wednesday to file a report on their shareholding structure and a plan to put at least 51% percent of equity in indigenous hands over the next five years. But the conflicting statements suggested companies could be caught in the middle of the latest dispute within Zimbabwe's unity government.

Political sources said that although the MDC formation led by Mr. Tsvangirai successfully urged the Cabinet to suspend the regulations, Mr. Mugabe's ZANU-PF was digging in for fear that indigenization, which some see as the corporate equivalent of land reform with a strong populist appeal, could be derailed or diluted.

Meanwhile, Parliament's Legal Committee said that a key provision in the indigenization regulations obliging companies to cede a controlling stake to indigenous or black investors violates the constitution, its chairman, Obert Gutu, told VOA.

Indigenization Minister Kasukuwere told VOA Studio 7 reporter Blessing Zulu that the indigenization process will go ahead even if the regulations are suspended.

Tsvangirai spokesman Maridadi said the Cabinet resolved that the indigenization minister should consult industry, commerce and members of the public before issuing new rules. He said that Kasukuwere should also consult Mr. Tsvangirai before gazetting new rules.

Maridadi told reporter Gibbs Dube that no date has been set for gazetting new indigenization regulations.

Economist Tony Hawkins of the University of Zimbabwe Graduate School of Management said the regulations are regulations are likely to be amended before black empowerment goes ahead - though this was before Mr. Mugabe had weighed in.

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