Zimbabwe's indigenisation gets $3bn

Zimbabwe claims its prickly indigenisation, partly blamed for driving off foreign investors, has seen a transfer of over $3 billion worth of shares from 1,000 foreign-owned firms to locals. The transfer is over a four year period. President Robert Mugabe’s Zanu PF party is championing the policy, using a 2008 law that requires all foreign firms, including mines and banks, to be majority-controlled by local blacks. Although Zanu PF campaigned on the platform of indigenisation, critics say it is becoming increasingly clear the party is unable to proceed after the polls with a programme continuously damaging the economy, fuelling capital flight and keeping investors at bay. However, according to the National Indigenisation and Economic Empowerment Board compliance report, 1,089 applications have been processed since 2010 with mining accounting for 398. The report indicates that 600 companies in various sectors transferred $535 million worth of shares to local hands. Under the energy sector a total of $6 million shares swapped hands, transport ($40 million), services ($3 million), real estate ($4 million), financial services ($16 million), and construction ($57 million). “The Ministry of Youth Development, Indigenisation and Economic Empowerment and the National Indigenisation and Economic Empowerment Board, in implementing the indigenisation and economic empowerment policy, have processed 1,089 applications since the year 2010. “This figure includes 218 applications in the sectors of finance and tourism that are held by the ministry. “The distribution of applications was tilted towards the manufacturing and mining sectors of the economy” reads part of the report. The figures are viewed by the ruling party as empowering of locals and this is despite there being strong feelings that that indigenisation is benefitting only those who are politically connected. This is confirmed by reports of Zanu PF bigwigs grabbing shares in companies, mines and conservancies under the guise of indigenisation. However, recently, the International Monetary Fund (IMF) told Zimbabwe to review its indigenisation policy to help the country boost mutually beneficial domestic and foreign investment. It is however, unlikely that Mugabe’s government would agree to a wholesale rethink of the indigenisation law and run the risk of being seen as bending over backwards to the IMF. Although Zimbabwe is desperate for international support to lift itself out of the economic quagmire, party politics and populism always seem to triumph over national good. *Source theafricareport]]>