Maravi

(NEWZIMBABWE, REUTERS) Mugabe reassures foreign investors

Mugabe reassures foreign investors
06/09/2011 00:00:00
by Nelson Banya I Reuters

PRESDENT Robert Mugabe said on Tuesday he expected the full cooperation of foreign firms in a plan for local blacks to take controlling stakes in their business operations in the country.

He also said in the speech to parliament that foreign investment was safe in the southern African country, which has been shunned by investors due to the plan to force foreign companies to turn over shares, as well as suspected human rights violations.

"I wish to assure investors that their investments in the country remain safe and to urge them to maintain compliance with the country's laws," Mugabe said when opening the session of parliament.

Mugabe also highlighted what he said were successes scored by the coalition he formed in 2009 with his rival Prime Minister Morgan Tsvangirai, including the setting up independent commissions and electoral reforms, and called for an end to violence.

However, as Mugabe was speaking, supporters from his Zanu PF attacked activists from Tsvangirai's MDC party outside the parliament building, according to a Reuters witness.

Mugabe signed the economic empowerment law in 2008 that forces foreign firms -- including mines and banks -- to surrender at least 51 percent shares in their operations to local blacks. It has yet to be implemented.

Analysts see the threat as a way to squeeze more funds out of the companies tying to build operations in the country with the world's second biggest platinum reserves after South Africa.

There is not enough capital in destitute Zimbabwe to buy controlling stakes in the foreign firms and not enough expertise to run them.

In March, Youth Empowerment and Indigenisation Minister Savior Kasukuwere called the foreign firms to submit plans on how they intended to dispose of majority stakes by the end of that month.

Kasukuwere, who set and lifted several other deadlines, last month gave mining firms, including platinum producer Implats' local unit Zimplats, Aquarius' Mimosa mine and Rio Tinto's Murowa diamond mine a 14 day ultimatum to submit fresh plans.

Analysts say the government is trying to force each company to negotiate on a case-by-case basis and build up funds to fight elections planned for next year.

Mugabe also said the government wanted to set up a state mineral exploration firm to determine the extent of Zimbabwe's mineral wealth.

In a separate sector, he said the government was looking for a partner for its loss-making Air Zimbabwe, which could be the second state-owned firm to be sold to foreign investors after steelmaker ZISCO was bought by a unit of India's Essar Group.

"The grounding of some Air Zimbabwe planes is a big let-down to the nation, indeed, a sad development," Mugabe said referring to the planes which were declared unfit to fly by Zimbabwe's civil aviation authority.

Labels: FDI, INDIGENIZATION AND EMPOWERMENT ACT (ZIMBABWE), ROBERT MUGABE, SAVIOUR KASUKUWERE

posted by MrK @ 2:15 PM