Foreign firms to be nationalized (14-12-06)

Mugabe regime has taken the final step towards what amounts to nothing less than wholesale nationalisation of the economy. Contemptuously discarding international investment treaties signed with a number of countries since Independence, the corruption-riddled government has now targeted foreign-owned companies for take over through its National Indigenisation and Empowerment Policy (NIEP), approved by cabinet last week.

This is the final step in a systematic programme of nationalization that began in 2000 with the grabbing of much of the country’s commercial farmland. The often-violent dispossession of thousands of productive farmers was followed by wholesale theft of their homes, vehicles and equipment.

The mines were next. Legislation is currently before parliament that proposes a forced handover of 51 percent shareholding in all foreign owned-mines to the government.

This week, highly placed sources told The Zimbabwean that Mugabe was set to bulldoze through parliament a new law forcing all foreign companies to cede 50% of their shareholding to the state.

The recently-drafted NIEP has already sparked panic among investors. The sources said government would hold the equity in trust for local entrepreneurs, presumably the usual Zanu (PF) cronies. Foreign-owned companies would also be required to adhere to an employment equity quota.

Companies that stand to be affected include financial sector giants Old Mutual, Barclays Bank, Stanbic and Standard Chartered, mining conglomerates Anglo American, Rio Tinto and BHP and industrialists Lever Bros, BAT and Olivine.

It was not possible to obtain comment from Ozias Bvute of the Ministry of State for Indigenisation and Empowerment, responsible for the bill.

Economic analysts said the NIEP would sound the death-knell for desperately-needed investment – that has already dwindled virtually to nothing as a result of the ruling party’s disastrous economic mis-management and corruption.

Observers note that the new moves follow the virtual collapse of all parastatals following wholesale looting and asset stripping by those in power and the politically well-connected.

This latest move will certainly cause all eyes to be fixed upon the dispute between 15 aggrieved Dutch farmers and the Zimbabwe government that goes to arbitration in Paris this week.

The farmers, whose operations were protected by an international investment agreement between the Netherlands and Zimbabwe, are suing the Mugabe regime for the loss of their land, their assets and their livelihoods.

This test case will open the way for thousands of other displaced commercial farmers to sue the government for the loss of their property.