April 7th, 2011
03:52 PM GMT
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They call it “indigenization” in Zimbabwe. However, the process of forcing foreign mining firms to hand over 51% of their companies to local black owners is commonly understood by many to be “nationalization” or “expropriation.”

The Zimbabwean government says the forcible handover of a majority stake by foreign mining firms is necessary to readdress historical imbalances. It says international firms like Angloplat or ImpalaPlatinum are “taking money” out of the country and ordinary Zimbabweans aren’t benefiting from the country's mineral wealth.

Critics of the Indigenization Act say it’s not about giving mineral rights back to local Zimbabweans, but a way of ensuring an entrenched system of patronage in the southern African nation.

The issue is not about race, or even foreign ownership, say critics. Instead, it’s about buying support and currying favor among acolytes of Robert Mugabe’s ZANU PF party.

Mugabe’s partners in government, the MDC, seem powerless in the face of ZANU’s push for this far-reaching legislation. Prime Minister Morgan Tsvangarai has been reluctant to criticize the “indigenization” legislation – perhaps fearful of being labeled pro-white or pro-West? In its defense, the MDC has said companies should be paid fair market value for their stakes.

However, it still seems unclear how international mining firms will be compensated for their 51%. The Indigenization Minister, Saviour Kusukuwere, says the state will raise the money via a “Sovereign Wealth Fund.” He says mining companies will not be paid for any of their “underground assets” because they “belong to us.” However, companies will be compensated for “improvements” above ground.

Just weeks ago, Zimbabwe had an investment conference in Harare, urging foreign investors to come and do business there. These latest pronouncements can’t have done much good to Zimbabwe's reputation as an investor-friendly location.

What do you think?



soundoff (8 Responses)
  1. Moyo

    I think this is a good thing as it will ensure that businesses are more focussed in the country and less likely to be manipulated by foreigners. This will avoid businesses acting as apendages of foreign countries in exerting influence and thus regime change doctrine. Either that or they should be taxed to the hilt to ensure that citizens benefit more.

    April 7, 2011 at 4:31 pm |
  2. kemetalkebulan

    YES.....it is very good that foreigners do not own the economy of any developing country.The only reason these questions are raised is because its a black nation taking away something that whites had no business in the first place owning in a dominating fashion.First it was the land issue which is bearing fruit and will continue to for years to come,now its time for the companies that have been supporting developed economies with African resources to be split up so that some of the wealth stays in Africa......VIVA ZIMBABWE

    April 7, 2011 at 7:04 pm |
  3. Oladipo Akinyemi Omole

    Dear Robyn,
    It's been quite a while hasn't it? I was a bit surprised about Morgan Tsangvrai's disposition to Zimbabwe's expropriation policy and it goes to confirm that he's part of the devious contraption which Zimbabwe now is.His rationalizations or what you called being afraid of labeling is simply a smokescreen . In that you can see his true nature and what his MDC stands for. They're simply up to no good.MDC is a chip of the old block ZANU which seems obviously to have lost out in the devious wheeling and dealing in Zimbabwe.Like you rightly observed and critics agree, the issue is not about race, or even foreign ownership. It’s about buying support and currying favor among acolytes of Robert Mugabe’s ZANU PF party.
    Foreign investors anywhere on the planet should be able to guarantee their succession obligations and processes within the framework of existing laws properly so defined.In that context , Zimbabwe's demand for a 51% stake in Angloplat or ImpalaPlatinum is simply not realistic nor rational.It runs afoul of the law and business ethics.
    Just as in the Nigerian and the Ugandan example, the policy is still-born and portends stagnation and hardship for practically everybody.It's among the challenges Bill Clinton's AGOA would have to contend with and I quickly add that it's an issue in which "all nations have a legal interest". The partnership goons in the ZANU PF-MDC contraption are seeking is only obtainable when it's voluntary i.e a partnership is obtainable when two or more willing partners with means and technical expertise resolve to do business. Simply all the basics in Accounting 201& 202. As it is, ZANU PF and MDC lack the requirements of capital and expertise as well as the genetics in all cases and in their desperation may be willing to commit crime in "forcing" foreign investors to play ball.It makes a mockery of the law if this is allowed to play out again this time in Zimbabwe.In Nigeria,the rail company,the power company and British Petroleum as well as some wealthy banks like Standard Bank of West Africa, and Barclay's Bank were forced to relocate and lately Dunlop Nigeria Plc had to relocate to Ghana due to the cumulative effect of this obnoxious policy.Other landed property belonging to foreign investors through-out Nigeria and especially at Ikoyi and Victoria Island could not be effectively stolen,because deeds to these property are safely in the archives of their owners overseas.
    In circumstances like this, it's always necessary to reiterate that a good law or policy must be enforceable.Laws properly so defined must be easy to obey and essentially should stand the test of time.Since 1972 when the contraption was foisted on Nigeria,the result has been unprecedented corruption and hardship and of course so ridiculous and stupid is the policy that looting these firms treasuries have been largely impossible thanks to the resolute commitment of principal officers of these companies and the heirs of the original owners.It's so laughable that looted funds from treasuries of these companies were transferred to Switzerland,New York and other leading financial districts of the world and it's now inevitable the looters cannot access these funds again even in local banking networks due to a versatile financial accounting standards network world-wide.

    P.S:Robyn dear, it's so unfortunate that this is happening, but the good news is that the policy is still-born.
    On a lighter note, I must say it's been a pleasure discussing with you and I would jump at any opportunity to visit you in South Africa.Please let's stay in touch and I would really appreciate it.Cheers and LOL.
    Your friend,
    Oladipo

    April 10, 2011 at 1:19 am |
  4. massive true

    thats a very noble piece of legislation which seeks to empower zimbabweans the only problem is that a lot of people have minds of criticism when it comes to zimbabwe, please lets apply critical minds and people you will definitely see that this one is a tool for economic growth in the long run. I do not dispute however that there are loopholes like benefiting the elites instead of the majority

    April 22, 2011 at 8:38 pm |
  5. Kenichi Kaga

    Today I saw 'Is indigenization bad for business?'. I spent four years up until 1986 in Zimbabwe.
    At that time still the country was beautiful and there were still a lot of Europeans.
    They were not suffering from hyper inflation though sometimes we had difficulty to have fish and things like that.
    What Robert Mugabe is doing is totally ridiculous and he is the one to ruin the country. If he did not forfeited lands
    from white farmers this kind of hyper inflation would not have happened. I wanted Robyn Curnow to criticize the government more severly.

    April 23, 2011 at 8:21 am |
  6. okorongo

    As long as the majority populace benefit or have economical derivatives then this will remain a noble idea but if its for the sake of the rich cronnies then shame on zimbabwe and the minister of indegenisation. What does people surrounding Marange benefit if the whole area is taken by business people from Harare. MDC has nothing to say because this is a national thing even MDC members need to be empowered by we the Zimbabweans so dont blame.

    April 28, 2011 at 1:13 pm |
  7. Biodun

    African leaders and pride, indigenalization has never achieve answered any progres report in africa and i made bold to say i t wil nt answer. ONLY VISIONARY LEADERSHIP wil produce.

    July 20, 2011 at 6:05 pm |
  8. icon downloads

    In it something is. Thanks for the information, cab, I too can help you something?

    hpixel

    September 24, 2012 at 3:54 pm |

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