Zimbabwe PM rejects sale of foreign firms to locals

HARARE — Zimbabwe Prime Minister Morgan Tsvangirai on Wednesday dismissed proposed regulations forcing foreign companies to sell the majority of their shares to locals.

“They were published without due process as detailed in the Global Political Agreement (GPA) and the constitution, and they are therefore null and void,” Tsvangirai said in a statement.

According to a report by the state media, the Indigenisation and Economic Empowerment Act was to become law in March, aimed at giving locals 51 percent shareholding in foreign companies.

According to Tsvangirai, the regulations were not reviewed by cabinet before they were gazetted.

It was targeted at companies valued at 500,000 dollars (364,000 euros) or above, according to a document released last year.

Zimbabwe is recovering from a decade of economic collapse and the new unity government formed early last year is trying to woo investors into the country.

“New investors will also be given five years from the date of commencement of business to comply with the regulations,” the paper said.

The controversial measure was first approved in 2007, but never signed into law by President Robert Mugabe.

It remains to be seen how investors will react to the new law.

In December, Finance Minister Tendai Biti said Zimbabwe needs 45 billion dollars to return its economy to peak levels seen more than 10 years ago.

The southern African country used to be a leading exporter of food in the region, but the agricultural sector collapsed due to a controversial land reform programme which forced white farmers to give their land to unskilled black farmers.

Foreign companies currently operating in Zimbabwe include mining companies, retailers and tourism firms.

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