Mugabe firmly in charge

President Robert Mugabe, has vowed to press on with plans to force foreign-owned firms to cede majority stake to locals after Prime Minister Morgan Tsvangirais office said the process had been suspended.

Analysts said this was meant to undermine the premier and show the veteran leader still has a firm grip on the African nation.

Tsvangirais spokesman, James Maridadi, said on Tuesday Cabinet had resolved to suspend empowerment regulations giving foreign and white-owned companies a 45-day deadline to present their plans on how they intend to transfer 51 percent to blacks within the next five years.

But 86-year-old Mugabe, Zimbabwes sole ruler since independence until he was forced into a power-sharing deal with Tsvangirai, said on Wednesday the process had not been suspended but that a special cabinet committee had been tasked to improve the regulations.

The contradicting comments have left investors confused and is a sign of the turf wars being fought between Mugabes Zanu (PF) and Tsvangirais Movement for Democratic Change (MDC) in the fragile unity government.

Obviously we are seeing the voice of reason being trampled upon and the usual intransigence coming to the fore. The same negative forces whose policies have trumped this economy in the past are once again determined to destroy whatever is left of this economy, John Robertson, a consultant economist said.

What I read from all these contradicting statements is, Mugabe is saying he is in charge and that only his word carries the day, John Makumbe, political science lecturer at the University of Zimbabwe said.

You need to understand the background of Mugabes utterances. He was speaking to new farmers at the tobacco auction floors and did you expect him to accept that he was forced to backtrack on the indigenisation regulations, said Makumbe.

Large foreign companies with businesses in Zimbabwe include Anglo Platinum and Impala Platinum Holdings, and Rio Tinto in the mining sector and Standard Chartered Plc, Barclays Bank Plc and South Africa’s Standard Bank.

Critics say Mugabe is pressing ahead with the empowerment drive to lay the foundation for his partys future election campaign and to reward loyalists especially in the military and security establishment for continuing to back his rule

The MDC has repeatedly accused the octogenarian leader of seeking to undermine Tsvangirai. The two bitter rivals are already locked in a dispute over power sharing, with South African President Jacob Zuma mediating to try to find a breakthrough.

The MDC, which advocates for investor friendly policies is fighting to water down the empowerment rules, which analysts say would discourage foreign investment and damage efforts to rebuild an economy that shrank by more than 40 percent during a crisis-ridden decade before rebounding in 2009.

A Zanu (PF) dominated Parliament passed an Indigenisation and Economic Empowerment Bill in 2007, which was signed into law by Mugabe in March 2008, on the eve of a general election he lost to the MDC and well before the formation of the power-sharing administration last year.