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Zimbabwe eyes takeover of all foreign firms
HARARE, Zimbabwe — President Robert Mugabe plans to seize majority stakes in all of Zimbabwe’s foreign-owned businesses in what economists warn could be a repeat of the regime’s disastrous land-reform policy.
Under legislation approved by the Cabinet two weeks ago, all companies will be required to give up at least 51 percent of their shares for allocation to economically disadvantaged, “indigenous” Zimbabweans.
There are signs that the government intends to use the laws to attack the commercial interests of countries such as Britain, the former colonial ruler, which Mr. Mugabe accuses of plotting to remove him from power. However, companies linked with friendly regimes, such as China and Malaysia, will be protected.
The hit list is likely to include British banks such as Standard Chartered and Barclays; BP, which has 37 service stations in Zimbabwe; British American Tobacco and Unilever — which is listed in both Britain and the Netherlands.
A Cabinet minister told the Sunday Telegraph that the British banks were seen to have “sabotaged” Mr. Mugabe’s land-reform program by refusing to extend financial support to black farmers.
“The president made it clear, when Cabinet approved the bill … that the time had come to empower our people,” the official said. “He said the indigenization exercise must be undertaken in the same fashion as the land-reform program.’
The minister added that Mr. Mugabe had vowed that “imperialist companies” would be targeted because they had been operating with what the president described as a “sinister, regime-change agenda.”
Standard Chartered, which has 26 offices employing 900 people in Zimbabwe, declined to comment. A spokesman for Barclays, which has 29 branches and more than 1,000 staff in the country, said: “We are currently assessing the potential impact of the proposed legislation on our business in Zimbabwe. It is early days, and the proposed bill may not become law.”
Paul Mangwana, the minister for “indigenization and empowerment,” said the legislation, which is before Parliament, would affect all sectors of the economy from banking to manufacturing. Companies would be “free to look for partners who are black,” he said, but government would “make suggestions” if they could not find any.
“The objective is to ensure that black Zimbabweans take control of the economy and the resources of their country,” he said.
The Zimbabwean economy has been in a freefall for years, and last month, the annual inflation rate reached a record 3,714 percent.
The Mugabe government, fearing the fast-deteriorating economic crisis could spark an uprising, embarked on a fierce clampdown on the opposition in March. Since then, hundreds of opposition party supporters have been arrested and dozens beaten, including main opposition leader Morgan Tsvangirai.
Over the weekend, riot police raided the headquarters of Mr. Tsvangirai’s Movement for Democratic Change and arrested close to 200 supporters, party spokesman Nelson Chamisa told the Associated Press.
As with the land-reform program, many in business suspect that the real beneficiaries of the asset grab will be Mr. Mugabe’s cronies and officials of the ruling Zimbabwe African National Union-Patriotic Front (ZANU-PF) party, who will take control of the companies under the guise of business consortiums.
“Mugabe operates on patronage, and to try to bolster his position, he will hand over these companies to people who support him. He’s been threatening it for a long time,” said an executive with a major British firm.
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