Mugabes cronies could harm industry, says report

Business Monitor International (BMI) said the appointment of officials believed to be cronies of President Mugabe would have a negative effect on the outcome of the exercise. There were fears the indigenisation exercise would enrich Mugabe and his supporters in a similar way to the land reform programme begun in 2000.

The committee is made up of Chris Hokonya, Chris Mutsvangwa, Trevor Manhanga, Trynos Nkomo, Annackleta Gumba, Hamilton Pazvakavambwa, Walter Sarabga, Richard Mubaiwa, Supa Mandiwanzira, Engineer Mukudu, Forbes Magumbate, Elizabeth Chitiga and John Mangudya. It is chaired by Tinashe Rwodzi.

Zimbabwe Chamber of Mines boss Vincent Gapare was fired from the committee in September.

It comes as no surprise that many indigenisation committee members are allies of President Robert Mugabe, which raises fears over the transparency of the entire process. BMI will monitor developments on this topic as they occur, the international economic think-tank said in its report.

BMI said again that government should relax some of its requirements regarding foreign-owned business firms ceding a major stake of their operations to indigenous Zimbabweans.

The Indigenisation and Empowerment Act originally called for a 51 per cent stake in all mining companies with assets over US$500,000 to be handed over to indigenous Zimbabwean groups.

We reiterate our long-held view that there is a pressing need to negotiate with mining companies and resolve the issue of mining ownership once and for all, so foreign investors can work within a clear legal framework, said the report.

The push to increase indigenous ownership of Zimbabwean assets was condemned earlier in 2010 by the countrys Chamber of Mines, with ****Mining Weekly*** reporting in May 2010 that the Chamber is petitioning the government to instead impose a variable level of indigenous ownership (from 15 per cent up to 51 per cent, arguing that companies that have invested in schools and roads should be subject to a lower indigenous ownership limit than 51 per cent.