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Sanctions: Will business take cue from Zanu PF?

Chris Muronzi

BARELY a month after Defence minister Emmerson Mnangagwa threatened foreign owned companies who did not castigate the imposition of sanctions on Zanu Pf officials and family members, TA boss Shingi Mutasa’s remarks appeared in sync.

And strangely so.

 

Mnangagwa gave foreign businesspeople  few choices; castigate sanctions or lose shareholding, a whole lot of it.

Analysts discounted the threat as a desperate bid to have President Robert Mugabe and party heavyweights removed from United States and European imposed sanctions.

“We will ask them if they support sanctions or not,” Mnangagwa said. “Those who indicate that they do not support sanctions will be asked to go live on national radio and tell the nation and the rest of the world their company does not support sanctions.”

The money realised from the 90% share takeovers would go into a new “anti-sanctions fund”, Mnangagwa said.

The fund would be used to finance a campaign against restrictive measures and “all foreign companies operating in the country (would be) compelled to assist,” he said.

While many could have dismissed it as mere talk then, Mutasa’s comments two weeks ago could just be the beginning of a long list of corporate leaders coming out against sanctions.

His comments met Mnangagwa’s dictates; it has to be public and the message clear.

And Mutasa’s remarks were just that: public and clear.

“The sanctions issue is very real. It’s not a fake issue, it is real. I personally think that the issue of sanctions is wrong. We shouldn’t be having sanctions in this country. It’s something that is an issue,” Mutasa said.

This, analysts say could see corporate leaders parroting Zanu PF’s line in order to keep their business, if Mnangagwa’s threats are anything to go by.
But Mutasa’s circumstances are a bit different.

He said Masawara plc –– which holds a 40% stake in Joina City and 30% in diversified concern TA Holdings –– nearly failed to list on the Alternative Investment Market (AIM) of the LSE and lost a key investor after a company linked to him was accused of holding shares in a formerly blacklisted local bank.

Masawara, an investment company, eventually undertook an IPO last August raising US$25 million after legally defending the allegations.
But the point had been made; sanctions are not cool for business.

It was not all parroting.

He told delagates that Zimbabwe had tight exchange control measures in Zimbabwe that could frustrate companies seeking capital abroad.

Official figures put the number of white and foreign-owned companies still operating in the country at around 500. Mnangagwa’s comments came after Mugabe warned European companies with operations in the country could face takeover unless sanctions were removed.

“We have been far too good for malicious people for countries which seek to destroy us,” Mugabe told a Zanu PF annual meeting last year. “Why should we continue to have 400 British companies here operating freely with Britain benefiting from us?

Zanu PF views sanctions as punishment for its land reform policies.

The party claims sanctions are at the centre of economic problems that characterised the economy in the last decade.

Western countries say sanctions target only senior government and Zanu PF officials accused of rights abuses as well as those stifling democracy and the rule of law.

Zanu PF has also accused its partners in the unity government –– MDC-T— of not doing enough to have sanctions removed.

Analysts say the latest push to involve the corporate world in its sanctions fight is mainly meant to target European companies in the country, for long the target of takeover under indegenisation and empowerment regulations gazetted last year.

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