Old mutual reaches agreement with govt

World insurance giant, Old Mutual on Wednesday reached an agreement with the Zimbabwean government on the implementation of the country’s indigenization and empowerment law, Youth Empowerment Minister Saviour Kasukuwere said.

ZANU PF supporters holding placards early this year at a rally calling for the targeting of foreign owned companies.
ZANU PF supporters holding placards early this year at a rally calling for the targeting of foreign owned companies.

Addressing a news conference in Harare, Kasukuwere said, the first phase of implementation and compliance with the law will be 25 percent.

The insurance giant has agreed to grant pensioners 10 percent, 9 percent grant and awards to staff equivalent of Old Mutual Limited.

“Old Mutual has reached an agreement with Ministry of Youth Development, Indigenization and Empowerment towards the implementation and compliance with Indeginization and Economic Empowerment legislation of Zimbabwe,” Kasukuwere said.

Kasukuwere said a 3.5% of Old Mutual Limited will be allocated to strategic indigenous partners on a commercial basis.

A 2.5 percent grant to Youth Development Fund valued at US$10 million and an extra US$1 million will be availed from the Old Mutual Fund.

The fund will be co-administered by the Ministry and Old Mutual and disbursed through Old Mutual/CABS.

Old Mutual’s consent comes on the heels of Kasukuwere’s imminent ultimatum in which foreign owned banks such as Barclays, Stanbic and Standard Chartered as well as several mining firms was warned they risk seizure and loss of operating licenses if they fail to comply with the indigenization law by 30 September 2011.

Stanbic’s empowerment plan is understood to have been rejected.

On Wednesday, Old Mutual also agreed to establish an Agriculture Fund, with the Ministry of Agriculture and the Ministry of Finance to support the development of Agriculture within the framework of National Indigenisation policy and legislation.

The insurance company has also agreed to finance a US$15 million housing fund to construct 1 500 housing units in Harare’s Budiriro township and to participate in US$40 million National Housing Fund.

A US$20 million liquidity fund towards supporting businesses and disbursed through CABS will also be established by Old Mutual.

The empowerment law compels all foreign-owned companies to give up at least 51% of their equity to locals as part of measures aimed at empowering the economically marginalized black majority.

However majority of Zimbabweans feel the indigenization law is masked in anti-imperialist connotations likely to benefit fat cats who have benefited from President Mugabe’s 30 year autocratic rule.

Business and economic analysts have predicted loss of investment if the guerilla style empowerment law is implemented in its form.

Foreign companies seem to have backed down to Kasukuwere’s threats with Zimbabwe Platinum Mines (Zimplats) a subsidiary of Impala Platinum Holdings (IMP) agreeing to revise its proposal for indigenization that had been rejected by government earlier on.

The platinum mining company was given until November 15 2011 to submit a revised indigenisation plan to the Zimbabwean government after threats to withdraw its license.

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