PRIME MINISTER TSVANGIRAI . . . promised new and “more progressive” empowerment laws

HARARE – Zimbabwe’s Cabinet has shelved plans to force foreign-owned firms to cede majority stake to local blacks, following pressure from Prime Minister Morgan Tsvangirai, labour and business.

James Maridadi, the spokesman for Tsvangirai, told ZimOnline last night that new regulations will be announced after consultations between relevant government ministries and all stakeholders, in a rare victory for a Premier engaged in a tough struggle with the wily Mugabe for control of their year-old coalition government.

He said: "Cabinet has put finality to the issue of the indigenisation regulations. Those regulations that had been gazetted earlier on have been declared null and void and concerned parties have been directed by Cabinet to go and consult before a new set of regulations can take effect.”

According to Maridadi the government is going to publish a new legal instrument formally withdrawing the controversial indigenisation regulations that gave foreign owned firms 45 days from March 1 to submit proposals on how they intended to offload 51 percent stake to indigenous Zimbabweans by March 2015.

The laws that Mugabe had vocally backed had sent panic across the business community with threats of stiff penalties against those that failed to comply targeted all foreign-owned firms valued at or more than US$500 000.

Large multinational corporations such as cigarette manufacturer BAT Zimbabwe, which is 80 percent British-owned; UK-controlled financial institutions Barclays Bank and Standard Chartered Bank, Swiss-owned food group Nestlé Zimbabwe, mining giants Rio Tinto and Zimplats, and AON Insurance were among firms that would have been hit hard by the suspended regulations.

But Tsvangirai stood his ground, insisting that the empowerment laws be dropped and replaced with a new indigenisation programme that should aim to empower the majority while creating conditions to ensure Zimbabwe was able to compete for the limited available international investment capital.

Sources said Tsvangirai eventually managed to convince Mugabe to drop the empowerment laws at their weekly Monday meeting.

Zimbabwe’s economy registered its first growth in a decade last year after Mugabe and Tsvangirai’s coalition government implemented measures, including the adoption of multiple currencies that doused hyperinflation.

But incessant bickering between the two former foes over how to share executive power continues to scare away foreign investors whose funds are vital to any effort to rebuild Zimbabwe’s shattered economy.

In addition, rich Western nations, unconvinced by Mugabe’s commitment to democratic reforms, have refused to provide direct financial support that Harare needs to widen reconstruction programmes and quicken economic revival.

Western governments say they want to see more political reforms and that the Harare government acts to end human rights abuses before they can loosen the purse strings. – ZimOnline.