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By Mxolisi Ncube

JOHANNESBURG – The opposition ZAPU party this week called on the splintered MDC to reverse President Robert Mugabe’s indigenisation law, warning that the new legislation would “finish-off” Zimbabwe’s ailing economy.

In a statement released Tuesday, ZAPU said that the indigenization law has had a negative impact on the country’s hitherto recovering economy within days of its coming into effect.

“Dollarisation of the economy has seen companies grow from 10 to 35 percent capacity utilization as of December 2009,” reads a statement released by Methuseli Moyo, the ZAPU spokesman Tuesday.

The party said that regardless of who owned them Zimbabwean companies still needed extra capital to grow, and that this capital could only be sourced from foreign investors as local banks still had a liquidity problem.

“There were some notable investment deals, such as Shoprite of SA negotiating to buy into OK Zimbabwe. OK Zimbabwe is a black controlled listed company. We have to ask ourselves if Ok Zimbabwe is better off without Shoprite SA. Is Shoprite going to invest millions of Rand in Zimbabwe under an environment where laws are ad hoc and make investors minority shareholders, even where they have put in most, if not all the capital?”

The opposition party added that since the Zimbabwe Stock Exchange (ZSE) began trading in US dollars in February last year, the market capitalization grew by over 118 percent to over $4.5 billion by December 2009 and that the growth was driven by foreign investors, who foresaw potential on the ZSE.

The money from foreign buyers found its way into the treasury by way of taxes, while a large percentage of US dollars currently in circulation in Zimbabwe came from Foreign Portfolio Investments, but the situation had changed since the announcement of the latest indigenisation laws by Zanu-PF, as activity on the ZSE had ground to a halt and the collapse of the ZSE could not be ruled out.

“There is no country in Africa today with a larger percentage of indigenous enterprises than Zimbabwe. A look at our tourism, manufacturing, banking and mining confirms this.

“In Victoria Falls, two of the biggest players in hotel industry are Africa Sun and the Rainbow Tourism Group (RTG). Who owns them? It is indigenous Zimbabweans. What those businesses need now is not more indigenization, but more capital to increase capacity and renovate the hotels.  Where are they going to get the capital from? Obviously from foreign investors who are now scared to come in because of the new law,” said the party.

ZAPU accused Mugabe’s administration of having destroyed two of Zimbabwe’s biggest companies in the Wankie Colliery Company and the Zimbabwe Electricity Supply Authority (ZESA) and farms, conservancies and hunting safaris in Matabeleland North, through poor management and chaotic land reform.

“In Bulawayo, one of the biggest companies, Tregers is 49 percent owned by Zanu-PF. The other big company, PPC is listed, leaving only Dunlop as the only company which could be said to be foreign-owned.

“In Gweru, the largest employer and significant asset is ZimAlloys.  ZimAlloys was bought by two prominent Zimbabweans from Anglo American a few years ago and as we write this article, they are in negotiations with a South African based company to invest in their business.  Do they need the money?  Yes they do. They need to refurbish the furnaces, increase capacity and working capital.

“With the enactment of this legislation we do not know if the negotiations are going to yield anything.  Obviously, Zimbabwe would be the major loser if the deal does not succeed. In the Kwekwe area, we all know owns the three big companies.”

The Dumiso Dabengwa-led party warned that the already struggling Zimbabwean economy would buckle under pressure piled on it by Zanu-PF’s populist policies and lack of vision, which it said were designed to save Mugabe’s party from eventual demise at the next elections.

“If not careful, the two MDCs may be guilty by association if they do not take practical steps to force Zanu-PF to abandon its indigenization policy. Press statements are not enough when dealing with the Zanu-PF establishment. If the MDC-T was prepared to leave government over the personalities of Roy Bennett, Gideon Gono and Johannes Tomana, surely they should be prepared to do more for the millions of Zimbabweans who are at risk of yet another Zanu-PF-induced suffering,” said ZAPU.

“The indigenization law has horrendous implications on economic growth, employment creation, government revenues, among other issues. ………our economic intelligence informs us that Zimbabwe lost more than US$3billion in potential investments over the past three weeks when it became clear that Zanu-PF would impose its will once more on its IG partners. We are told a lot of money is leaving the country already.”

ZAPU added that although it supported indigenisation, “ratios must be reasonable, and the timing right”.

“It is our view that the current ratios are unreasonable and the timing is not right, except maybe for Zanu-PF, which thrives under hunger and strife. This country needs serious investment and no serious investment comes under such conditions.

The party, which gave an insinuation that the indigenisation law targeted the less than 15 profitable, non indigenous companies in Zimbabwe, like Zimplats, Hippo Valley Estates, Mimosa and a few bank, added that there was no need to pass such “a massive law to target these few companies” and questioned the criteria to be used to qualify the indigenous partners.

“Obviously patronage based on party, ethnic, family and other affiliation will carry the day for the usual beneficiaries of the so-called indigenization policy,” said Zapu.

It called on the government to “immediately withdraw the indigenization legislation before the country is taken centuries back into the Stone Age by clueless old men and women conniving with greedy opportunistic young men and women, who want to reap where they did not sow”.

“Zanu-P, and indeed the rest of us, must know that the world does not owe us anything. If investors are not happy, they will go to the next shop.

“It is as simple as that. We are a small factor in the global financial system to change international investment norms. We need to know how to negotiate. The take-it-or-leave-it mentality will make the majority of our people poorer. It is just a few individuals who will benefit from company takeovers, as happened with farm takeovers, while the rest of the population sink further into poverty.

“It is sad that Zanu-PF chefs are prepared to see us suffer more as long as they get what they want. They do not care what happens to the rest of the population because they have access to diamonds from Marange, and boast that they will sell them on the side-markets and make millions if they wish.

“Such actions and sentiments only come from leaders who are drunk with power and wealth and do not reason properly anymore.”

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