Accessibility links

Breaking News

Zimbabwe Central Banker Resists 'Indigenization' Of Mines, Banks

A showdown was looming in the Zimbabwean cabinet Tuesday between President Robert Mugabe and Reserve Bank Governor Gideon Gono over legislation, already passed by parliament and awaiting the president's signature, that would allow the government to take a 51% stake in any company not controlled by blacks.

Gono is warning that the so-called Indigenization and Economic Empowerment Bill would further cripple the economy – but Mr. Mugabe is expected to sign soon.

Party insiders say political expediency is at war with sustainable economic policies, as ZANU-PF hawks Indigenization Minister Paul Mangwana, Mines Minister Amos Midzi, Justice Minister Patrick Chinamasa and others argue that the indigenization program, seemingly a populist initiative, will be a plus for ZANU-PF in 2008 elections.

Lined up against them are Gono, retired General Solomon Mujuru and technocrats such as former finance minister Simba Makoni, who argue that the indigenization program could put the last nail in the coffin of Zimbabwe's moribund economy.

Gono last week accused unnamed senior officials of “positioning themselves to muscle into certain mining, manufacturing, financial and other entities that are currently performing well and contributing to the foreign currency inflows of the country.”

He warned that he will resist moves to “forcibly push the envelop of indigenization into the delicate area of banking and finance.”

But Magwana says there is no turning back on indigenization.

Chief Economist Prosper Chitambara of the Labor and Economic Development Research Institute of Zimbabwe told reporter Blessing Zulu of VOA's Studio 7 for Zimbabwe that divisions over indigenization reflect an economic impasse.

More reports from VOA's Studio 7 for Zimbabwe...