New policy sparks investor panic (23-11-06)

HARARE - An increasingly acrimonious standoff between government and business seems likely following plans by government to bulldoze through Parliament a controversial policy okayed by Cabinet last week called the National Indigenisation and Empowerment Policy (NIEP).
The policy document, wh

ich has not been made public, proposes to force all foreign companies to sell up to 50 percent of shares in local operations to government. The explosive document, which was crafted by the Ministry of State for Indigenisation and Empowerment, has sparked panic among investors.
Official sources said the policy document has been sent to the Attorney General for proof-reading before being brought to the House of Assembly, where it is expected to sail smoothly through Zanu (PF)’s technical two thirds Parliamentary majority.
Besides forcing companies to cede 50 percent to government, which will hold the equity in trust of local entrepreneurs, foreign owned companies would also be required to adhere to an employment equity quota.
It was not possible to obtain comment from the relevant ministry.
Economic analysts said the new NIEP would decimate what little investment was left and that the new law has all the trappings of the Mines Bill which government claims is intended to open the industry to participation by black investors marginalized through a century of white domination.
The fiasco surrounding the new indigenisation policy has raised concerns in business circles that government was “muscling” in on foreign-owned companies after running down parastatals.

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