Move to change control of foreign-owned companies to local control

Sources: Zimbabwe Independent - Zibabwe: Companies Will Fund Indigenisation Bill
Financial Times - Companies in Zimbabwe Start to go Local

The controversial Indigenisation and Economic Empowerment Bill came before the Zimbabwe parliament this week. The bill is part of the government’s plan to restructure the economy and place control in the hands of the indigenous population. Initially, when Zimbabwe gained its independence, the economy was comprised mostly of white multi-national conglomerates with minimal participation by the black indigenous population. However, the proposed bill will grant the indigenous population a majority stake in all businesses operating in Zimbabwe.

This bill aims to transfer control over all sectors of the economy to the black indigenous population. Under this bill, the government can impose levies upon any private or public company to fund the purchase of the 51% indigenous-owned shares. The money will be placed into a fund that will go to purchase the 51% shares of these foreign companies. If the companies do not sell 51% of the company to the locals, their ability to operate in Zimbabwe will be withdrawn. Furthermore, new foreign investors trying to come into Zimbabwe must agree to this 51% share requirement before they are approved.

Discussion Questions:
Do you believe that this bill is linked to the land redistribution plan that intends to transfer land from white landowners back to the original indigenous black landowners? Do you believe that this bill will lead to sustainable economic growth? Do you think indigenization will help alleviate the acute poverty that is prevalent among black Zimbabweans? Will this frustrate foreign companies from investing in Zimbabwe?