It is reported that foreign companies operating in Zimbabwe had until Sunday to hand in plans to sell majority stakes to local blacks under a law that has alarmed investors who are uncertain how the rules will work.
The government order for the transfer of 51% ownership has been called the final phase of economic emancipation after controversial land reforms targeting white owned farms a decade ago. But analysts are skeptical.
Mr Anthony Hawkins a University of Zimbabwe economics professor said "There is no way the local and the government has the money to buy shares in the companies. Everybody knows that."
He said that the indigenization drive could hurt the economy in the same way as the land reforms which sparked an economic nose-dive after supporters of President Mr Robert Mugabe violently seized white-owned farms.
Mr Hawkins about polls expected next year said "My concern is that this is much more of a political policy and it will have an economic harm just like the land reforms. It looks like they are doing this for the elections."
He said that "This will reduce the amount of investment in the country as the new owners will not have the money to, for example, expand projects. The community does not have the money, as well as the workers and the government is broke."
The push is without the violence of the land seizures which Mr Mugabe said was a way to correct colonial-era wrongs, but there is mixed signals on how the law will be implemented.
Mr Saviour Kasukuwere Indigenization Minister has warned that non-compliant companies risk nationalization. But certain firms have arranged their own deals and deadlines ahead of Sunday cut-off date making the government appear flexible on how the law is implemented.
(Sourced from AFP)
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