Whatever anybody might wish, the indigenisation issue is not going away and is not going to go away. Today is Zimbabwe’s Independence Day and the theme decreed by President Mugabe for the day’s celebrations is “Indigenisation and Economic Empowerment for Economic Transformation”. It is an issue that will remain in the forefront of the political economy of Zimbabwe until after the next election has taken place. In the meantime it will continue to be a source of political rhetoric, political argument and investor uncertainty.
On 5 April the Minister for Indigenisation, Hon Saviour Kasukuwere, announced that Government was taking over 51% of the shares of all foreign-owned mining companies that had not yet submitted an acceptable indigenisation plan to his Ministry. He said that profits accruing to the 51% now belong to the Government and warned those companies involved that attempts to defraud the State would be prosecuted. He has no legal power to do this – neither the Indigenisation and Economic Empowerment Act or any related legislation gives him such power – and this was quickly pointed out by the Prime Minister, Hon Morgan Tsvangirai, as well as by the Minister of Finance, Hon Tendai Biti. Minister Biti emphasised that the Government of Zimbabwe has no policy of nationalisation and that what Minister Kasukuwere was attempting to do is unconstitutional and unlawful. He described Minister Kasukuwere as “running amok” and said that many ZANU(PF) ministers in the Cabinet are equally opposed to Minister Kasukuwere’s drive to forcibly take over foreign-owned mines. The Minister of Economic Planning and Investment Promotion, Hon Tapiwa Mashakada, described Minister Kasukuwere’s decision as “null and void”. He went on to say “I want to assure investors that Zimbabwe is open for business as government is not going to expropriate or nationalise their companies.
Minister Mashakada also noted that although over US$ 6 billion of investment projects were approved last year, none of them have yet been implemented because of the overtones of expropriation and nationalisation coming from Minister Kasukewere. He quite correctly said that “Investors want predictability and consistency.”
Minister Kasukuwere responded by saying that he would not take orders from Prime Minister Tsvangirai and in a moment of extreme purple prose described himself as “Hitler tenfold” in his desire to obtain justice for his people and recognition of their independence. German visitors to Zimbabwe at the time were not impressed.
The latest mining company to have its indigenisation plan approved is Anglo-American Platinum, the owner of Unki Mine.
Earlier this week Minister Kasukuwere told the Reuters Africa Investment Summit in Johannesburg that he expected all the transactions involving indigenisation of mines to be completed by the end of this month. He did not, however, give any indication of how shares offered to the Government would be paid for but he did suggest that private sector players are involved in raising funds for the purchase of the shares on offer. There has been an unconfirmed report that a consortium of indigenous businessmen is seeking to raise the necessary capital to purchase a controlling interest in Unki Mine. It has to be said that the likelihood of such funds being raised is low. It will be recalled that Zimplats offered 15% of its shares to a local consortium in 2003 – an offer that remained on the table but was never taken up as the local businessmen were unable to raise the purchase price of the shares – US$ 31 million at the time.
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