Posted on September 14, 2005

Zim Minister Warns of Takeover of White-Owned Firms

Sapa-DPA, Sept. 13

A Cabinet minister in Zimbabwe has warned the government may take over white-owned firms in an exercise similar to actions under Harare’s five-year-old land-reform programme, a newspaper reported on Tuesday.

Minister of Transport Chris Mushohwe told a business conference in the mountain resort of Nyanga last week that the government could seize companies owned or run by whites, the privately run Daily Mirror reported.

“Most of these companies do not want to give us equity. We might decide to take over these companies just like we did during the land-reform exercise,” Mushohwe was quoted as telling the conference.

Zimbabwe’s economy has been in rapid decline since the launch of the land-reform programme, which has cut production in the key agricultural sector.

Last Friday, Mugabe signed into law controversial amendments to the Constitution that will make it impossible for the 4 000 or so white farmers who have lost their land to contest the takeovers in court.

The Daily Mirror said black executives attending the conference, organised by the Confederation of Zimbabwe Industries (CZI), were unimpressed by the transport minister’s comments.

“What signals does this send to investors?” one executive was quoted as asking.

The changes to Zimbabwe’s Constitution also promote “affirmative action” in favour of “persons who have been previously disadvantaged by unfair discrimination”.

Economists say the new land laws, which also give ownership of all agricultural land to the state, will drive off foreign investment.

But the paper said Minister of Finance Herbert Murerwa told the CZI conference that the amendments to the Constitution were not a threat to commerce and industry.

“The intention [of the constitutional amendments] was to confirm the acquisition of land that had already been taken anyway. We have never said that this would apply to other forms of business,” Murerwa said.

It was not immediately clear how many whites still own businesses. A recent population census revealed that whites and Asians make up 0,5% of the country’s 11,6-million people.