AFRICANGLOBE – As Zimbabwe’s liquidity declines and its stock market slumps, President Robert Mugabe’s Zanu-PF party says it will soon launch a racially exclusive stock exchange in which only black people will be able to trade shares in foreign-owned companies it plans to seize.
The plan to indigenise mining companies – of which the major ones are White South African-owned – without compensation follows President Mugabe’s landslide victory in elections last week which the opposition Movement for Democratic Change party is crying foul.
Saviour Kasukuwere, Zanu-PF’s Indigenisation Minister in the former government, announced the party’s plan on Tuesday. He said the incoming Zanu-PF government or Black Zimbabweans would seize a majority stake in all major foreign-owned companies, estimated to be worth a total of about R100 billion, without compensation.
Zanu-PF especially wants to indegenise mining companies and in particular Zimplats (Pvt) Ltd, a major platinum producer largely owned by South Africa’s Impala Platinum Holdings Ltd. Other firms operating in the country include Anglo American Platinum (Amplats) and banks include Standard Chartered and Barclays.
On Tuesday on the JSE, Implats fell 2.65% and Amplats lost 1.1 %. Barclays Bank of Zimbabwe lost 20% on the Zimbabwe Stock Exchange, whose industrial index dipped 2.2% after plunging 11% on Monday.
Kasukuwere said mining companies that did not “cede” 51% shares to Zimbabweans or the government would lose their operating licences. He said the natural resources or underground metals were sufficient to pay for majority shareholdings in mining companies.
“When it comes to natural resources, Zimbabwe will not pay for her resources,” Kasukuwere said in an interview with Bloomberg.
Zanu-PF spokesman, Psychology Maziwisa, confirmed that Kasukuwere’s remarks about reclaiming mining companies and creating a Blacks-only Harare Stock Exchange before year end were Zanu-PF policy.
“All of this is correct. It’s what we told voters we will do,” he said.
The legislation allowing indigenisation of all companies valued at more than R5 million says shares should be sold, not ceded, but President Mugabe mocked this regularly in the last few years. Zimplats does not have a refinery and it sends its ore to South Africa for refining and export.
It would take a few years and about R1bn to build a refinery in Zimbabwe. Zimplats imports its electricity directly from Mozambique because it cannot rely on Zimbabwe’s faltering power output. Economist John Robertson said there was no logic to Zanu-PF’s plan.
“He (Kasukuwere) is in danger of introducing economic apartheid, which is absurd. The assets he says he wants do not add up to cash and the value of those assets will obviously decline. Metals and minerals, including platinum and gold, accounted for 71%, or US$791 million of Zimbabwe’s exports last year.