Zimbabwean Minister of Indigenization Saviour Kasukuwere has threatened to close more than 9,000 foreign-owned firms that have failed to submit plans for the acquisition of majority stakes by indigenous black investors.
Kasukuwere was quoted by the state-controlled Sunday Mail newspaper as saying that only 480 out of some 9,577 foreign-owned firms had submitted such plans to his ministry by a June 30 deadline.
He said companies facing loss of trading licenses include De Beers Zimbabwe Prospecting, sugar manufacturer Triangle Private Ltd. and top fast food firm Innscor Ltd.
The government has revised indigenization regulations gazetted earlier this year - but has not changed the requirement for a 51 percent stake to be acquired by indigenous investors over the next five years.
Harare economist John Robertson told VOA Studio 7 reporter Gibbs Dube that Kasukuwere’s threats may lead some of those companies to submit the required shareholding proposals to the government.
“We are yet to see whether all the companies will be intimidated by these threats or the government will be taken to court and be challenged over some of these indigenization processes,” Robertson said.
Meanwhile, the government has told the top executives of all state-controlled enterprises to report on their salaries as it moves to reduce executive pay amounting in some cases to US$15,000 a month.
State Enterprises Minister Gorden Moyo said the Cabinet has resolved that pay for top parastatal managers is out of line with economic realities and must be rationalized to reflect current conditions. Parastatal executive salaries range from US$11,000 to US$15,000 a month whereas most civil servants make no more than US$175 a month.
Moyo said in an interview that the hefty salaries paid to top managers must be cut because most state enterprises are not generating enough income to sustain operations.
Economist Godfrey Kanyenze of the Labor and Economic Development Research Institute of Zimbabwe said pay for managers cannot remain at current levels when state enterprises are failing to deliver basic services.