THE government is working on a statutory instrument to ensure that the Indigenisation and Economic Empowerment Act gazetted last Friday will start operating in the next two weeks, said Indigenisation minister, Paul Mangwana. “There is no going back on the drive to empower Zimbabweans. In fact the Act could start operating within the next two weeks,” Mangwana said.
The law which compels foreign owned companies to sell a 51% shareholding to locals is seen by analysts as part of Zanu-PF’s campaign strategy ahead of the elections set for March 29.
Listed companies already under threat from the law include Barclays Bank, CAFCA, Bindura Nickel Corporation, British American Tobacco (BAT), Circle Cement, Celsys and Old Mutual.
Stanbic Bank, Standard Chartered Bank and MBCA are also targets of the new laws.
Mining companies to be affected include Anglo Platinum (Angloplats), LonZim (Lonzim), Zimbabwe Platinum (Zimplats), Metallon, Aquarius Platinum and Rio Tinto.
Metallon is Zimbabwe’s biggest gold producer and operates five mines, namely Mazowe, Arcturus, Redwing, Shamva and How Mine.
Agloplats owns Unki Platinum mine in Shurugwi area. Aquarius Platinum and Zimplats are equal shareholders in Mimosa Mine. LonZim owns Peak Mine. Mangwana tried to allay fears in the market by saying the 51% threshold would be implemented over differing time periods for different sectors.
“The minister will publish schedules of time frames soon. It could be five years or ten years. There is no reason for people to panic, we will engage sector by sector,” he said.
“There will be no expropriation. Indigenous partners will have to either inject new capital by raising the share capital of the business or by buyout of the 51%,” he said.
Mangwana also said that it was not every sector that would be required to enforce the 51% threshold and said small businesses would be exempted. Business leaders are worried.
The Zimbabwe National Chamber of Commerce (ZNCC) said the Act, while being good, was ill-timed.
Confederation of Zimbabwe Industries (CZI) president Callisto Jokonya said industry was concerned with how the law will be implemented.