18 December 2012

Zimbabwe: U.S. $4 Billion Looted From Mining Companies Through Indigenisation

A total of $4 billion has so far been raised by government from shares that big mining firms were forced to give up under the National Indigenisation and Economic Empowerment Act.

According to the state run Sunday Mail newspaper, Indigenisation and Empowerment Minister Saviour Kasukuwere last week said the Sovereign Wealth Fund had reached $4 billion after two more mining companies gave up 51% of their shares in compliance.

Kasukuwere said Unki Platinum and Mimosa had finally complied with the indigenization laws after submitting revised compliance proposals. Mimosa's deal raised $550 million dollars and was the most lucrative so far. A deal with one more company, Zimplats, is expected to be cleared sometime this week.

According to reports, mining sector officials in the country this week said government had given them no choice but to "vendor finance" their proposals or risk losing their operations completely.

Increased pressure on the mining firms came after ZANU PF passed resolutions at their conference earlier this month, calling for intensified pressure on the companies.

According to Kasukuwere $1.8 billion of the acquired shares went through the National Indigenisation and Economic Empowerment Fund (Nieef) and the rest is supposed to go to community trusts and employee share ownerships schemes.

Luke Zunga from the Global Zim Forum dismissed the indigenisation policies as nothing more than massive looting. He said the communities and so-called indigenous people, who are supposed to benefit, do not have direct access to any of the money made through indigenisation.

"These shares are either going to be held in the Sovereign Fund or whatever, so that they are in the control of those departments of government. It is these organizations that decide how much to give to the communities," Zunga explained.

He added: "This is asking for scandal, money disappearing and people killing each other going after the money. This is not an economic development policy. It is not. It is simply taking over shares from people who have been building up their companies."

Economists have criticized ZANU PF's indigenisation plan as massive looting and electioneering, saying it drives away foreign investors and has a negative impact on the economy.

The MDC formations have also received strong criticism for not being more vocal in opposing the plans.

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