Zimbabwe: Govt Cracks Down On Foreign Firms Over Local Ownership

Zimbabwe has given foreign firms just over a week to cede majority stakes to locals or face closure. Critics say the move will discourage foreign investment in an economy which is struggling.00311664-8014de9d676075d2b288e292ee76dad5-arc614x376-w285-us1

Zimbabwe has said it will cancel licenses of foreign firms which have not complied with legislation forcing them to hand over majority stakes to local shareholders.

The government adopted thet legislation in 2008 to compel foreign firms to cede at least 51 percent to promote black ownership and correct imbalances from the colonial era. However, this law is often not adhered to.

This latest move to implement the Indigenisation and Economic Empowerment Act was announced on Wednesday (23.03.2016) by Empowerment Minister Patrick Zhuwao.

Some companies have “continued to disregard” the law prompting the government’s order to close non-compliant firms, Zhuwao said.

“It’s either you comply or you close your shop,” he added.

Foreign companies in Zimbabwe include mining operations, such as platinum producers Anglo-American Platinum and Impala Platinum and banking groups Standard Chartered and Barclays.

The two platinum producers have previously submitted empowerment plans to be considered by President Robert Mugabe’s government.

Zhuwao said he did not have details of which companies had complied with the law and would therefore not be banned.