THE timing of gazetting regulations under the Indigenization and Economic Empowerment Act of 2008 calling for foreign investors to cede 51% of their investment to “indigenous people” is most perplexing and appears hurried. Last month the government gazetted the Indigenisation and Economic Empowerment (General) Regulations 2010 which say that by mid-April all businesses must give the state details on the racial composition of their shareholdings. The move drew swift responses from partners in government and a panicky industry.

The directive wants companies to put a majority of their shares in the hands of “indigenous” Zimbabwean blacks. It calls for completion of the exercise within five years.

Under the new rules the government will determine what stake in an enterprise must be ceded to “indigenous” Zimbabweans. Companies missing the deadline face up to five years in jail.

The timing is perplexing because it comes soon after Prime Minister Morgan Tsvangirai returned from the World Economic Forum in Davos, Switzerland, where he faced international investors unsettled about whether to put their money in Zimbabwe. After his assurances the regulations would appear a slap in the Prime Minister’s face.

It is a move that seems to undercut efforts at reviving the economy.

There was a swift and trenchant response from the Prime Minister saying neither he nor the cabinet were shown the regulations before they were gazetted. The regulations “were published without due process as detailed in the Constitution and are therefore null and void” he shot back.

The Prime Minister’s office through a press statement said the regulations were null and void because the rules were published without “discussion or authorisation by the cabinet”.

This is the second discordant development in government in as many weeks. The first was a directive to ministers and permanent secretaries to report directly to Vice-Presidents instead of the Prime Minister.

This directive has fortunately since been withdrawn but not before exposing the fragile nature of the inclusive government and the contesting centres of power.

It is not just the Prime Minister who fired off an irate response. Industry swiftly registered its alarm, begging the question: who then was “consulted widely” prior to gazetting the regulations and whether due consideration was given to concerns from the international investor community.

The urgency with which these measures have to be implemented suggests the “land grab model” is being applied to businesses possibly to secure Zanu PF’s interests — vote-buying of the powerful elite clique — and support for its election war chest ahead of next year’s polls.

Since 2008 the government had done little to indicate its intent on enforcing the regulations.

However this recent development could prove counter-productive because it risks portraying Zimbabwe as a dodgy investment destination.

It is curious that the same ministry which clandestinely recruited 13 000 Zanu PF youths onto the government payroll, should again and so soon be linked to this unilateral, and controversial regulations.

This would appear a deliberate attempt to undermine the country and its people at a time when Zimbabwe desperately needs foreign direct investment.

The suspicion is that Zanu PF is creating a new theatre for abuse by its “loot-ocracy”. The beneficiaries, as under the land reform, will not be ordinary men and women, but those politically-connected to Zanu PF bigwigs.

There is need to stay or reverse the regulations. Otherwise the inclusive government has scored a major own goal.

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