Monday, March 10, 2008

Is Mugabe's "Indigenisation and Economic Empowerment Bill" A Political Ploy?

excerpt from:
BBC NEWS Africa Mugabe approves new ownership law

Zimbabwe's President Robert Mugabe has approved legislation giving local owners the right to take a majority share of foreign companies.

Mr Mugabe's formal approval of the Indigenisation and Economic Empowerment Bill comes three weeks ahead of his country's presidential elections.

Under the legislation, every company must have at least 51% of their shares owned by black Zimbabweans. If not, the government will block new investment, mergers or restructuring. The new law means some of the country's biggest businesses - such as the mining giant, Rio Tinto, and Barclays Bank - will have to find local partners.

The bill will give black Zimbabweans the power to share in the wealth of their country, according to Sikhanyiso Ndlovu, Mr Mugabe's information minister.

"It is an historic economic empowerment bill that has been signed," Mr Ndlovu told the BBC. "It is the first of its kind in the whole of Africa."

But to the opposition Movement for Democratic Change party, the law is a cynical attempt to buy public support ahead of elections scheduled for 29 March.

And rather than helping the economy, independent economists suggest the new law is likely to cripple foreign investment badly need to help stem the country's inflation, which is now officially running at more than 100,000%

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