Zimbabwe President Robert Mugabe says foreign companies that comply with his indigenization law are guaranteed security.
His comment is a deviation from his earlier promise that he would revise the policy, which analysts repeatedly have said scares away investors.
At the official launch Thursday of an $82-million cement manufacturing plant by a South African company, PPC Zimbabwe, a frail looking 93-year-old Zimbabwe President Robert Mugabe said he was happy the company had not resisted the indigenization law, as other foreign companies have done.
"By so doing, PPC Zimbabwe has demonstrated what so many companies are struggling to put in place," said Mugabe. " And it has demonstrated also that the indigenization policy and philosophy is no hindrance to foreign investment. But instead the policy guarantees security of such investment.”
The southern African nation passed the controversial indigenization law in 2008, which forces foreign companies to cede 51 percent of their stake to black Zimbabweans. Mugabe argues that indigenization policy is meant to correct colonial imbalances that marginalized blacks in Zimbabwe.
On Thursday, PPC Zimbabwe managing director Kelibone Masiyane did not want to be drawn into the politics of the controversial law while speaking to reporters after Mugabe’s speech.
“I always say the cement business is a 30-year business," said Masiyane . "So whatever we might be encountering at the moment is only short-term. We are looking into the future, so we are here in Zimbabwe for the long run.”
Last year, indigenization minister Patrick Zhuwawo gave a 90-day ultimatum to foreign companies that had not submitted plans for how they would comply with the indigenization law. He did not implement his threat of revoking their licenses when the deadline passed, which made investors jittery.
Before that, Zimbabwe had nationalized all diamond mining, but some took the matter to court and the cases are still pending.