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Statement on the pronounced compulsory acquisition of 51% stake in all foreign owned mines in Zimbabwe
Centre for Research and Development
April 10, 2012

The Center for Research and Development is deeply shocked by the recent announcement by the Minister of Youth Development, Indigenization and Economic Empowerment, Mr. Savior Kasukuwere, claiming that government had compulsorily acquired 51% shareholding in all foreign owned companies in Zimbabwe. The minister added that Zimbabweans 'are now expected to defend the Zimbabwean 51% equity stake and to also uphold and execute the national interest in respect of administration, trade, and any other business transactions so as to ensure total indigenous economic empowerment'.

The move by the minister comes at a time Zimbabwe's economy is slowly recovering from a decade long economic recession precipitated by a chaotic and often violent land reform program that left over half a million farm workers jobless and more than half of Zimbabwe's population surviving on food aid from humanitarian donor organizations. CRD believes the purported land reform program was only a continuation of unfair land grab by those in power, similar to the expropriation of land by the British settlers throughout the 20th century. The land question is far from over as it is now clear that the exercise was motivated by greed and quest for political survival.

It is indeed sad that the same motives which drove the land reform exercise 10 years ago, which saw scores of ministers and their allies owning as many as 10 farms each is now at play in the mining sector. Government cannot acquire 51% equity without paying for the shares and without strategic plans to ensure that the companies in which government is a majority shareholder do not go the way of Air Zimbabwe, Grain Marketing Board, National Railways of Zimbabwe, Zimbabwe United Passenger Company (ZUPCO), District Development Fund (DDF), ZESA, ZINWA and all the parastatals. There are tens of thousands of workers in the mining sector whose livelihoods are at stake.

If government is concerned about the human security of its citizens it must not embark on policies that scare away investors and make its people vulnerable. The world over, good governments are renowned for creating environments where investors feel confident to invest their capital and where their investments are protected by law. Good governments also create laws that promote transparency and accountability in order to maximize revenue collection from extraction of their natural resources.

CRD warns government against politicizing mines as the repercussions are severe for the ordinary Zimbabwean. Whilst a few rich and powerful individuals will benefit in the short term, the consequences of this move by Minister Kasukuwere will destabilize the mining sector and militates against the medium term plan whose success hinges much on the performance of the mining sector. We also caution the Minister against inciting violence by calling on workers and ordinary Zimbabweans "to defend the Zimbabwean 51% equity stake".

CRD calls on the Zimbabwe government not to mix the implementation of the indigenization law with election campaigning as this will further dis-empower the intended beneficiaries. We further urge government to call Minister Kasukuwere to order and stop him from issuing controversial / personal statements on behalf of the Inclusive Government.

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