Kasukuwere compounds foreign investors’ woes

By Roadwin Chirara

HARARE – Zimbabwe’s announcement that several multinational companies had a 14-day ultimatum to submit “acceptable indigenisation proposals” has caused panic among foreign investors.

While the affected companies, include Barclays Bank Zimbabwe Limited, British American Tobacco, Cargil Zimbabwe, Mimosa, Murowa Diamonds, Nestle, Standard Chartered Bank and Zimbabwe Platinum Mines, it has emerged that none of the firms have received any official communication on new crack down.

Caledonia Mining – which owns Blanket and Duration Mines – has emerged the first to expose Saviour Kasukuwere’s Indigenisation department, which says “defaulting” firms risk losing their operating licences.

“Caledonia submitted a comprehensive indigenisation proposal (the “proposal”) to the Minister for Indigenisation on May 9, 2011. Since then, neither Blanket nor Caledonia have received any formal notification that the proposal is deficient or that it should be revised within any specified timescale,” the company said in a statement yesterday.

According to statistics, about 700 foreign-owned companies have submitted their empowerment plans – of which 175 were mining companies hoping to sell only 26 percent and have the balance fulfilled by social credits. The latest move dashes hopes and optimism that the government was not going to implement the controversial plan in its present form following a downward review of fines due to non-compliant firm.

Meanwhile, the Toronto-listed gold mining concern maintained the Harare government had over stepped its mark with the latest order – setting the tone for a major fight between the major corporates and President Robert Mugabe’s administration.

“Caledonia has, however, received a copy of a letter sent from the Minister for Indigenisation to the Minister of Mines, in which he requests that the Minister of Mines cancels Blanket’s operating licence on the grounds that Caledonia’s proposal does not meet the legislated indigenisation requirements,” the company said.

The mining company said it would continue with its mining operations as it consults over the decision by the Indigenisation ministry to have its operation licence cancelled.

“Caledonia believes the Minister for Indigenisation has exceeded his legal powers both in terms of his assessment of Caledonia’s proposal and his request to the Minister of Mines. Caledonia is seeking urgent clarification from the relevant ministers, and is also consulting with its legal advisers regarding appropriate legal action,” the company said.

A number of executives contacted by businessdaily were locked in meetings with their parent companies. Takunda Mugaga, an economic commentator, said the government decision was ill-timed. “It’s a very disturbing development considering the impact on the mid-term plan and what it aims to achieve,” Mugaga said.

He said the announcement would impact negatively on the stability of the financial services sector. “The banking sector has no room for ultimatums as it would cause capital flight. It’s a poor decision on the part of government,” said Mugaga. According to the Herald, Kasukuwere says he is empowered by the Indigenisation Act to enforce a general notice for mining companies to cede 51 percent of their equity to black locals within five years.

In enforcing the seizures, the youthful minister says he will enlist Obert Mpofu’s Mines ministry and the Reserve Bank of Zimbabwe (RBZ)’s support, although there were indications late Friday that central bank governor Gideon Gono was preparing a damning statement on the planned seizures of companies, especially banks.

Recently, the RBZ chief said in a monetary policy statement that Zimbabwe’s indigenisation exercise must be done in a just and equitable manner that promotes investment, and economic recovery. Daily News