Zimbabwe may cancel business licenses held by foreign-owned companies if they don’t comply with a requirement to cede 51 percent ownership to black Zimbabweans, Empowerment Minister Saviour Kasukuwere said.
“We have extended the deadline for submitting indigenization plans to May 15. If companies do not comply, we will issue them with forms to complete within 30 days, where after they risk having their business licenses revoked,” Kasukuwere said in a telephone interview from Harare today.
Mining companies will be among the businesses targeted first in the effort to hand control to black Zimbabweans, Kasukuwere said.
“The mining industry is our priority,” the minister said. “We will soon begin discussions with stakeholders to plan timeframes and thresholds with miners.”
Black Zimbabweans acquiring 51 percent of Zimbabwe-based businesses would have to pay “market value” for their shares, Kasukuwere said.
“There’s been some confusion over the word ‘cede’,” he said. “It does not mean foreigners must give shares in their companies for nothing.”
About 400 foreign-owned companies have submitted empowerment plans to the government so far, Kasukuwere said. He said he was unable to say how many companies were affected by the law, which came into effect in March.
Under the Indigenization and Empowerment Act, foreign-owned businesses have five years to sell 51 percent of their shares to black Zimbabweans.
The legality of the act is disputed by Zimbabwe’s Movement for Democratic Change, which shares power with the Zimbabwe African National Union-Patriotic Front, the party that drafted the law. The measure was pushed through parliament before parliamentary elections in March 2008 in which the MDC won a majority.