Fin24

Zim's pro-black laws scare off investors

2012-11-30 08:15

Harare - Zimbabwe Prime Minister Morgan Tsvangirai Thursday said the country's laws that force foreign firms to cede majority stakes to local blacks is driving away desperately needed foreign investment.

"That policy discord is what has led to the crisis of investment in this country," Tsvangirai told his Movement Democratic Change supporters as he launched the party's economic blueprint in Harare.

The two-year-old "indigenisation" law compels all foreign-owned companies to surrender 51% of their share holding to black Zimbabweans in an attempt to reverse the inequalities caused by the country's colonial past.

It is a key area of contention between Tsvangirai and his coalition government partner, President Robert Mugabe.

The three-year-old power-sharing deal helped prevent the southern African country from tipping into a full scale conflict and stabilised the economy after bloody elections in 2008.

"Our plan is to transform Zimbabwe into a newly industrialised nation within a generation," said Tsvangirai in what is seen as a precursor an electoral platform, ahead of a 2013 vote to end the uneasy coalition government.

"We intend to raise Zimbabwe from failed state status where perception and suspicion run riot within the investor community whenever Zimbabwe is mentioned as a possible investment destination."

Tsvangirai said the indigenisation policy pushed by his rival Mugabe is not the solution to the investment crisis and a runaway unemployment rate of over 80%.

"The crisis we face... is opportunities for jobs," he said.

Tsvangirai who is to face Mugabe in the election said the country needs to respect investors' property rights if it is to revive moribund industries.

On Wednesday, Indigenisation Minister Saviour Kasukuwere, a member of Mugabe's ZANU-PF party, warned that foreign companies which fail to comply with the controversial law will face prosecution.

Tapiwa Mashakada, Zimbabwe's Economic Planning Minister and deputy secretary general of the MDC said investors are avoiding Zimbabwe and instead choosing the booming economies of Angola and Mozambique.

The law "kills investor confidence. You cannot bring your money to invest in Zimbabwe when someone takes over 50%. Capital is timid," said Mashakada.

Several companies like Zimplats, the Zimbabwean unit of South African's Impala Platinum, and Anglo American Platinum's mine in Zimbabwe, Unki, have submitted their plans to hand over majority shares to local people.

 

Comments
  • citizen.kane.35 - 2012-11-30 08:41

    lets post this on the ANC's website as they head the same way with BEE!

      alan.jerrold - 2012-11-30 10:04

      Of-bloody-course it scares off potential investors. Doesn't Mugabe realise how economics works??? You don't invest where it's not safe: Economics 101. Now South Africa needs to learn the same lesson. We're not as bad as Zim (yet) but with illegal strikes and the ANC constantly interfering with business that supplies the money for them to live very well, no wonder investors are looking at Brazil and India instead.

      saamprater.saampraat - 2012-11-30 10:54

      Whilst posting on their site, remind them that government only need to provide us a safe environment in to create jobs, schooling and business in general. As for the rest, they need to be hands off. That goes for our taxes as well

      jesibelle.krueger - 2012-11-30 11:19

      'Heading the same way with BEE'? Ha, ha, ha... South Africa's BEE laws are ALREADY a verbatim blue-print of the Zimbabwean "indigenisation" laws. SA's BEE laws forces companies by quotas to appoint incompetent people - iow "local" people (the euphemism for blacks) - it is EXACTLY the same thing (it already exists) and has EXACTLY the same effect on SA's economy as it has on the economy of Zimbabwe - ie it DESTROYS THE ECONOMY. BEE is just as idiotic as Zimbabwe's "indigenisation" laws - it chases investors away, the currency nose-dives, inflation goes up (and later out of control), unemployment sky-rockets, etc - brace yourself, South Africa is going the same way as Zimbabwe!

  • mlucejko - 2012-11-30 08:43

    Just 'kick-out' that 'Village-idiot Mugabe' and all his 'cronies' and all Zimbabwe's problems will be over.. Maybe then they can start to build a civilized democratic society that Businesses will be happy to invest in !!

      saamprater.saampraat - 2012-11-30 10:57

      Not so easy. Mugabs is being kept in place by the army who faces international courts for mass murder. The real problem is the head of the army. He is the big spanner in the works.

  • Sibusiso - 2012-11-30 08:43

    The Uncle Tom has spoken.

  • maureen.churchill.9 - 2012-11-30 08:47

    Won't be long before we are victims of the same rubbish, the writing is on the wall, this is SUPPOSED to be a non racial nation, equal opportunity baaaaa.

  • chris.gill.9849 - 2012-11-30 08:49

    Can you imagine if predominantly white countries like USA, Europe, UK, Australia, Russia etc said that all companies had to hand over 51% to white locals?

      ndlovu.norman - 2012-11-30 09:06

      If the laws of those countries allow such things to happen, i see no problem, do u chris?

      Nthokolose Puleng Marope - 2012-11-30 09:16

      @ Chris even now ownership of companis in dos countris is more dan 51% percent ownd by whites, dn't u knw?

      ange.kritzinger - 2012-11-30 09:30

      Ndlovu and Marope... It is not fair to take something from someone if they worked hard for it. My husband just started his 100% white company - he's the only "employee". He started with nothing, studied hard, got a job, saved and now has a company. How would you feel if you did that and someone forced you to hand over 50% of your hard work? Mahala...

      rob.bancroft.94 - 2012-11-30 09:36

      Yes, Marope, the reason for that is that they started those companies themselves and put their own money into them. Big dfference, bright spark! Is that your african style? Just to take, take and take!

      neil.ross.5473 - 2012-11-30 09:47

      Good point Chris. Imagine a Zim company (or an SA company) wanting to invest in Sweden. After all your fixed costs and start up costs, your payroll and your investment, Sweden then says: "Cool, now hand over 51% to local white Swedish people or we will throw you out". Would you make that foreign investment? Just because you are giving money to blacks (well connected, corrupt political elite blacks) and it is all warm and fuzzy and you are atoning for colonialism, is it supposed to make it all right? Sorry. Russian investors, Japanese, America, Canadian, whoever, are all hard-nosed businessmen and don't have any warm and fuzzy bones in their bodies. They'll just invest elsewhere and sorry, mugabe, that you've got a chip on your shoulder, but you've been a free, independent country for over 30 years - so go stuff yourself.

      neale.rundgren - 2012-11-30 09:50

      Ange, why bother explaining semantics with people whom simply refuse to listen to reason, it is like explaining the theory of Quantum Mechanics to a 'lab rat' It will eventually lead to an unsavoury discussion.

      ange.kritzinger - 2012-11-30 10:27

      LOL. Yes, Neale. I am surprised at the dislikes of my comment. Can only be done by people who have no idea that a company is just like a spaza shop, but with a different legal entity... Maybe they just stopped reading at the 100% white part and assumed therefore I must be a racist!! :)

      chris.gill.9849 - 2012-11-30 10:31

      @Ndlovo and Nthokolose, Australia has a lot of small business owned and started by Indians and Chinese people. If they turned around and told them to "hand it over to white Australians" their economy would be on the same slope as Zimbabwe. If Zimbabwe (and SA for that matter) want the badly needed investment in their countries, then they need to change their attitude. Neither country has the ability to sort out their massive unemployment problems without some massive foreign investment.

      ange.kritzinger - 2012-11-30 10:38

      Sorry, legal FORM (it IS an entity)...

      jesibelle.krueger - 2012-11-30 11:34

      @ndlovu.norman I have a far better idea: Let us give "South Africa" back to you the way white people found it - a feral stone-age wasteland. Your kind had not invented the wheel yet and not even a written language (the Bushman was millenia ahead of you - at least they had invented the means to record by images). You did not even understand what the horizon was, nor did you know where the minerals are-, or where it was (notably the deep minerals and as such the most precious) and/or what property was (you were nomadic roamers living off the land), most notably the concept of wealth and/or economics (ie "economic freedom"), most notably the entire concept of companies - it was brought to SA by three ships (so it is NOT part of your culture). So we take away 99% of your knowledge - as it all comes from the West (i.e. > 90% around you were invented in/by the West) including your means to write/type. Then let us see where you end up...

      denny.cray - 2012-11-30 14:35

      @Kagiso - actually there has been quite a lot of talk from populist youth leaders about suspending these payment conditions. Even assuming a fair market price is paid consider the implications. If someone came up to you and forced you to sell him the clothes off your back for a "fair market price" would this be acceptable? How about choice and property rights? Furthermore, this is the government we are talking about. They have *NO MONEY OTHER THAN WHAT THEY STEAL VIA TAXES*. Is stealing from Peter, Sipho and Thembi so Paul can get paid a "fair market price" actually any better than just stealing straight from Paul?

      ange.kritzinger - 2012-11-30 14:52

      Kagiso, I can see where you are going with your comment, and I respect that you think about this stuff. But...I have been looking into starting an overseas company (considering the direction SA is going), and there are many places where foreign ownership is not a problem. Africa cannot be compared with the USA. We desperately NEED foreign direct investment. I do not want to start my company in a country where someone who doesn't understand my idea the way I do, and who does not have the same passion for it the way I do, and who therefore will not work as hard as me, holds more shares than me (and are thus able to tell me what I must do with my OWN business idea). This is my personal decision, although I know that SA loses the job opportunities that I could create. It is sad that SA's labour laws take opportunities away from those who need it.

      Adventure.Mangwana - 2012-12-04 16:28

      I want to do this using my chinese calculator,So if l m said to share my 100rand with the disadvanged,then l will remain with a 49 rand as an individual,bt that 51rand will be shared at whatever share to many.want an answer pliz.

  • maureen.churchill.9 - 2012-11-30 08:49

    Won't be long before we follow you Zimbabwe. The writing is on the wall in indelible ink.

      sean.noble1 - 2012-11-30 08:53

      Sad but true, our local cadres follow the same principles, the goverment appears to be fighting for the man in the street but they are killing the economy and once its dead the poor of now will think they were rich.

      Sibusiso - 2012-11-30 09:06

      Actually I'm looking forward to that.Living in a country where the majority of entrepreneurs and wealth generators are black.Zim has seen the worst and they are headed for the best.Many professional Zimbabweans in this country can't wait to go back to their country and make their own contribution.I guess they are waiting for the Mugabe era to pass.

      rob.bancroft.94 - 2012-11-30 09:38

      Yes, Sibu, they are waiting for your Uncle Tom to take over!

      Sibusiso - 2012-11-30 10:18

      The Uncle Tom failed to take over during the worst of economic times.No hope for him now!

      richard.hipkin - 2012-11-30 10:55

      "Zim has seen the worst and they are headed for the best." Hahahahaha!!!

      saamprater.saampraat - 2012-11-30 11:04

      @ Sbu, the point you are missing is that they are all here now. Wonder why? Maybe their failed racism and Marxist indoctrination have caught up with them. (same thinking as you by looking at your posts) Why are they not where they belong? In their country!!! Why don't we see more black entrepreneurship here, even after 18 years with banks and the IDC only helping blacks? Why? Maybe your dream will come true in your time, then we will, like the centre of Pretoria have hundreds of hairdressers and spaza shops on the streets and that is your idea of job creation? No Sbu, just make peace with the fact that you need everyone in this country to make it work. Racism kills, drop it

      rob.bancroft.94 - 2012-11-30 15:27

      Wow, Sibu, you are really quite slow and uninformed. Why did the Uncle Tom fail to take over? Let me help you, because the dictator Mugabe would not let him and since Mugabe controls the police and the army, who is going to stop him.

  • michael.a.devilliers - 2012-11-30 08:49

    Our labour riots are so scary that Anglo Plats have picked Zim as the lesser of two evils. So not long at all...

      butch.poulter - 2012-11-30 09:20

      Not only Anglo many other large companies, PPC invest R100 mil as well. Zim staff much more educated and understand the word productivity. Unlike the wunt wunt attituide of SA labour at the moment.

  • kortbroek.duplessis - 2012-11-30 08:52

    Those calling for nationalisation of mines and farms should be listening carefully.

  • mshiniboys - 2012-11-30 09:07

    Nobody is indispensable on this earth even the so called superpowers.Outsiders must respect the rules and laws of the country and not come in to make rules.We need to break away from the hype that a country must depend on handouts for survivals.The country is doing business and the majority must benefit from their natural resources.To hell with all this nonsense.Look at the state of Nigeria for allowing "investors" to come and spill oil all over the country.All that these people care about is money while they kill animals and send chemicals to all water sources in the country.Enough.

      heini.botes - 2012-11-30 09:38

      Outsiders must respect the rules and laws you say, then they musn't complain that they can't attracked investors!! Lost my sympathy long ago with these thugs! You get what you vote for!

      goyougoodthing - 2012-11-30 09:43

      The average Zimbo sees nothing, don't be a tool.

      alan.jerrold - 2012-11-30 10:12

      mshiniboys - if the 'outsiders' as you call them hadn't come in and started the businesses, THERE WOULD BE NO BUSINESSES! Certainly not on a scale that requires multi-billion dollar investment. There would be just a few people trying to scratch minerals from the ground by hand, that all. And absolutely minimal benefits to the country. Care to disagree?

      stephanie.sutherland41 - 2012-11-30 10:16

      Well the South African Goverment has seen the waterways and resources of the country almost completely contaminated and the countries infrastructure in shambles, the Rhino on the brink of extiction and the food producers of the country deserting the land that will lead to starvation.How is that great, because you are going to starve and most foreign countries are going to revise aid to South Africa just between us. Foreign investors can't do any worse mate, at least they create jobs and growth instead of the downward trend encouraged by self enriching politicians that then blame their inadiquicies on apartheid. Grow up please.

      mshiniboys - 2012-11-30 10:50

      Revelgen then the damage would be less according to logic...no chemicals and no contamination to underground water.They could still use the land for farming..Care to disagree:)

      saamprater.saampraat - 2012-11-30 11:10

      You again? Take it one step back. Who told Nigeria where to look and dig for oil? Fairies? People willing to use their life savings to fund exploration companies, that is who. Now, all they want is a return on their investment. To hell with Marxists who sit in a democracy, enjoying the privileges of democracy but longs for and ask for Marxism. If that is what you want, go where they are. Here we want democracy.

  • ryan.goodman.3110 - 2012-11-30 09:14

    stating the bleeding obvious.

  • rinus.za - 2012-11-30 09:17

    Stating the very obvious... yet the ANC also fails to comprehend!

  • charmaine.mcdonald2 - 2012-11-30 09:19

    I would suggest that all the foreign investors pull out. This is ridiculous.

  • mshiniboys - 2012-11-30 09:22

    White people will always be jealous of black people so I know all that is being said here is directed to the race.Zimbabwe is a country that belongs to people and all the natural resources embedded in it.People must get it clearly that we are not talking about an Anglo American country here.If they feel the pain when business deals are "too good for locals" then they must pack and go and stop complaining.The country is soon going to be left with lots of chemicals,dead animals and poor soil void for any agricultural production while AngloAmerican or whatever the joke enjoy the benefits.Look at the state of Nigeria today after allowing these so called "investors' to spill oil all over and kill animals and fish.As far as Im concerned this is a good move by Zimbabwe and I could trade my life for such a mature method.

      jane.doeberman.58 - 2012-11-30 09:43

      In your dreams are white people jealous of black people - why would we be - you are idiots

      wehan.victor - 2012-11-30 09:45

      I smell wet dog, oh no its only mshiniboys.

      goyougoodthing - 2012-11-30 09:49

      I am sure that the people of Zim are so so happy with Mugabe and his millions of offshore dollars, the terror police and death squads.

      stephanie.sutherland41 - 2012-11-30 10:19

      You aren't anything to be jealous of, what gave you that silly notion. Sorry rolling on the floor laughing.

      richard.hipkin - 2012-11-30 10:56

      "White people will always be jealous of black people.." Hahahahahahaha!!

      saamprater.saampraat - 2012-11-30 11:12

      Mshini, you are a chop. We are against your dinosauric thinking. I could not care if you are green But I'm also tired of racists who live in a democracy that wants Marxism.

  • ziso.maziso - 2012-11-30 09:24

    As long as we have people like the PM who like saying things to please a certain group of people, then the policy will not move at the intended pace. Most countries have found ways of preserving certain segments of the economy for people indegenous to those countries. Why should Zimbabwe not do the same?

      stephanie.sutherland41 - 2012-11-30 10:21

      Yes but then it must be given in South Africa to the Khoi San and the Strandlopers as they are the only legit owners of South Africa. bahahahaha man i love it when the truth is a shocker hahahahaha

      saamprater.saampraat - 2012-11-30 11:15

      Zizo. they don't want some, they are asking for a share of all of the economy without creating it. But it's their country, they can stuff it up as badly as they want to. Me, self employed. Can't care less if a zillion Zimbos are here taking local jobs because the very thing you support have robbed them of theirs. Dinosaur

  • ian.robertreid - 2012-11-30 09:27

    Bob the gob pulled the drain plug on Zim long ago? feathered his own greedy nest!

  • pieter.pretorius.106 - 2012-11-30 09:34

    Hope our brainless government learns from his words. BEE does just as much damage to business potential in SA

      mammudi.makgaleng.3 - 2012-11-30 11:17

      Hmmm. Is unfortunate only few can see that. And the most painful part of it is that they don't give a damn about the public but to fill up their pockets. So people need to wake up and see beyond what is happening today because tomorrow it will be far worse.

  • heini.botes - 2012-11-30 09:35

    No Sympathy here what so ever, Zimbabwe is a disgrace. You reap what you sow!

  • Michel Louis - 2012-11-30 09:58

    Mugabe is last rempart against recolonization by Brits n co. let him live for ever

      saamprater.saampraat - 2012-11-30 11:20

      Yep, with a zillion of his countrymen basking in the wealth he created for them. Just a pity they are all in South Africa. Wonder why Dodo?

  • Joe - 2012-11-30 10:00

    Has anyone ever seen a happy white person?

      saamprater.saampraat - 2012-11-30 11:22

      Not in Harare. Why you here

  • stevetaggert99 - 2012-11-30 10:00

    A white owned business is required to do exactly the same in South Africa to get a high enough BEE rating to get enough business to survive.

  • brionyl.french - 2012-11-30 10:12

    SERIOUSLY PEOPLE GET OVER THE COLOUR OF YOUR SKIN!!! MONEY IS MONEY AND BUSINESS IS BUSINESS WHO CARES WHAT THEY LOOK LIKE. NEXT THING YOU KNOW NO ONE WILL DO BUSINESS WITH BLONDES, OR PEOPLE WHO'S HAIR IS GREY. WAKE THE F*&K UP RACIST PEOPLE

  • neil.ross.5473 - 2012-11-30 10:25

    Thirty three years of independence and billions in foreign aid and starting off with a fantastic infrastructure and being the "bread basket"of Africa. And now this. mugabe takes being a joke of a tin pot african dictator to levels so low even idi amin would be amazed. For the record, Germany was bombed flat by 1945. Fifteen years later half of it (the capitalist half) was the economic power house of Europe. Japan was obliterated completely. 15 years later, it was the world's second largest economy. And mugabe has taken 33 years to reach this point?

  • nico.leroux1 - 2012-11-30 10:30

    Wake up people!! Run and run fast!!

  • bigboy.henry.7 - 2012-11-30 10:41

    Tsvangirai you need to sit down.

  • glenview.rungano - 2012-11-30 12:55

    This puppet wants to please his master's but that will not happen , next year you will see him crying again!!!

  • kkmonakali - 2012-11-30 12:57

    Tsvangirai is a puppet, a counter revolutionary that nobody should listen to.ZIMBABWE WILL NEVER BE A COLONY AGAIN!!!

      marc.hugo.75 - 2012-11-30 14:29

      No, it won't ever be a colony again; you're right Rungano. After all, you need a 'colonial power' who would want it as a colony. And who would want the half-baked republic of Mugabwe. And the other thing Runguano, is that while they will never be a colony again, they will also never be prosperous again. The citizens will never eat properly again. Tourists will never visit again. Investors will never invest again. Need I go on? Until it dawns on the pathetic excrement that makes up the ZANU-PF that the country is bigger than they are and even more important than the people in it, important as they are, then they are destined to spend their days squatting on their haunches in front of an empty three-legged pot with nothing to offer but hate in their hearts.

  • lindela.ndzulu - 2012-11-30 13:52

    I diagree with Tsangarai,this is a great policy that is meant to address economic inbalances.The only thing that they need monitor there is corruption which is the problem in SA.

      marc.hugo.75 - 2012-11-30 14:38

      Its a rubbish policy Lindela. Do you honestly think that a potential investor from one of the 204 countries in the world other than Zimbabwe give a tinkers cuss about Zimbabwe's economic imbalances? Or their past? Or who's fault it is that that in 32 years of so-called freedom and play-play democracy after the chimurenga, the Mugabe junta has achieved nothing but disaster at every turn: economic collapse, grinding poverty, political intolerance and repression. Investors invest with the prospect of making a profit; of establishing a successful business. Employment is a by-product of investment - not its purpose. They want to make money and in turn, the spin-offs of that is what will burgeon an economic turnaround in Zimbabwe.

      hendrik.bruwer.3 - 2012-11-30 17:13

      economic imbalance? have you been to zimbabwe? everybody is poor!!!!

  • teboh.rapheal - 2012-12-03 21:51

    why can they not invest the money in portugal?

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