2010-04-14
HARARE (Reuters) - Zimbabwe will press on with its drive to transfer control of foreign firms to local blacks, a minister said on Wednesday, contradicting an announcement by a senior official that the process had been suspended.

Youth, Indigenisation and Empowerment Minister Saviour Kasukuwere -- of President Robert Mugabe's ZANU-PF party -- issued regulations last month ordering foreign firms to give details of shareholding structures and their plans to achieve majority local control.

But on Tuesday, Prime Minister Morgan Tsvangirai's spokesman James Maridadi said the cabinet had agreed to suspend and review the rules.

The regulations took effect on March 1 and gave foreign-owned firms, including banks and mines, 45 days to file proposals on how they planned to sell 51 percent of their shares to black Zimbabweans within five years.

The deadline for submitting proposals is Thursday, April 15.

Kasukuwere told Reuters in a telephone interview that the process had not been frozen -- underlining the power struggle under way between Mugabe's ZANU-PF and Tsvangirai's Movement for Democratic Change in the one-year-old unity government.

"That statement is at variance with the position taken by Cabinet. Someone is trying to play politics here," Kasukuwere said.

"The regulations have not been suspended. It's business as usual and businesses are encouraged to continue furnishing us with their empowerment proposals."

GOVERNMENT DIVIDED

Kasukuwere said the government would continue consulting businesses over the law, which would be applied differently to different sectors of the economy.

"The correct position is that we continue to interact with business, but we also continue to receive proposals," he said.

"We are not insisting on these companies becoming indigenous today. We are getting them to state how they propose to achieve compliance, then we will deal with their proposals, sector by sector."

The proposal for black Zimbabweans to take over foreign firms has divided the coalition government, with Mugabe and Tsvangirai publicly differing on the issue.

Mugabe's ZANU-PF government passed an indigenisation and economic empowerment law in 2007, well before he formed a power-sharing administration with Tsvangirai last year.

Analysts say the law would discourage investment and hurt efforts to rebuild an economy that shrank by more than 40 percent during a crisis-ridden decade before rebounding in 2009.

The government says Zimbabwe needs at least $10 billion to rebuild the economy, but foreign donors and investors are holding back aid and investments, waiting for reforms and signs that Mugabe is ready genuinely to share power.

Key foreign players in Zimbabwe's mining industry include Anglo Platinum and Impala Platinum Holdings, and Rio Tinto has gold and diamond mines in the country.

Britain's Standard Chartered Plc, Barclays Bank Plc and a unit of South Africa's Standard Bank are foreign-owned banks with operations in Zimbabwe.

Critics blame Mugabe, Zimbabwe's ruler since independence from Britain in 1980, for the country's economic woes, which worsened after his drive to seize white-owned farms to resettle landless blacks in 2000.

The veteran ruler denies the charge and blames Western sanctions for the economic crisis.