Zimbabwe empowerment law demanding 51 percent control of businesses for blacks delayed

Black empowerment law delayed in Zimbabwe

HARARE, Zimbabwe — Zimbabwe’s mostly white-owned businesses won’t immediately have to comply with a law that requires them to hand over 51 percent control to blacks, two ministers said Wednesday.

But it is unclear whether the controversial law that requires all businesses and foreign companies to meet race quotas will be eliminated or only delayed.

Gorden Moyo, a minister in the coalition government loyal to Prime Minister Morgan Tsvangirai, said in a statement Wednesday that the law was declared “null and void” at a meeting of the power-sharing government chaired by President Robert Mugabe on Tuesday.

“Cabinet agreed that the essence of the original regulations was against government’s policy of true empowerment through full utilization of our national resources and encouraging investment to drive economic growth,” he said.

The first deadline for companies to submit handover proposals was set for Thursday.

But Saviour Kasukuwere, a minister from Mugabe’s party, said implementation of the law will go ahead, but has been delayed for more discussions.

“They are consultations which must be made with various sectors and this is why the act has been set aside,” Kasukuwere said.

Rugare Gumbo, a spokesman for Mugabe’s ZANU-PF party, said the law’s implementation was being rescheduled to allow the government to win more widespread support.

“We support empowerment but accept adjustments have to be made,” he said.

The law was passed in 2008, when parliament was still dominated by Mugabe’s lawmakers. It aimed to benefit “indigenous” Zimbabweans — defined as those who suffered under colonial-era racial discrimination and their children born after independence in 1980, effectively excluding the nation’s 20,000 whites.

The announcement late February that the law, dormant for nearly two years, was being enforced shocked the business community a decade after Mugabe ordered the often violent seizures of thousands white-owned commercial farms, disrupting the agriculture-based economy in the former regional breadbasket.

Economist Eric Bloch in February likened the announcement to “an earthquake stronger than Haiti and Chile” to local businesses and investor confidence.

Even central bank governor Gideon Gono, a Mugabe loyalist, described the law as “driven by hate, racialism and greed by a few.”

The law came into force on March 1, giving businesses, including subsidiaries of foreign-owned companies and international banks, 45 days to comply by submitting their quotas.

Opposition lawmakers argued the law would scare investors and hurt the ailing economy in the southern African nation.