Stockbrokers work on the floor of the Zimbabwe Stock Exchange in Harare.
Stockbrokers work on the floor of the Zimbabwe Stock Exchange in Harare.

Zim wants exclusive black stock exchange

By Peta Thornycroft Time of article published Aug 7, 2013

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Harare -

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 grab mining companies - and the major ones are South African-owned - without compensation follows Mugabe’s landslide victory in elections last week which the opposition Movement for Democratic Change party and many civil rights groups say were rigged.

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 grab 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 percent and Amplats lost 1.1 percent. Barclays Bank of Zimbabwe lost 20 percent on the Zimbabwe Stock Exchange, whose industrial index dipped 2.2 percent after plunging 11 percent on Monday.

Kasukuwere said mining companies that did not “cede” 51 percent shares to black 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 seizing 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 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.

“I think this is only politicking and there is no substance to this.”

He said there is little money in the banks and the outflow will get worse over the next few days.

“It could become an avalanche,” he said.

Metals and minerals, including platinum and gold, accounted for 71 percent, or $791 million of Zimbabwe’s exports last year.

South Africa has a bilateral trade and protection agreement with Zimbabwe which seized mining companies could use to secure compensation or return of assets via international courts.When the elections were held in 2008 all schools and hospitals were shut and supermarkets were empty.

That situation improved significantly when the MDC entered government in an uneasy power-sharing arrangement, with the MDC finance and education ministers doing a sterling job to rebuild the economy and education.

Meanwhile, the MDC says it is focusing on 100 constituencies in its bid to turn around election results, and will lodge its appeals in court on Friday.

“As we speak, we are compiling the dossier on the irregularities...,” said spokesman Douglas Mwonzora.

Since Sunday, the party has been compiling reports from its losing candidates across the country on alleged poll irregularities, including voter intimidation, manipulation of voters’ roll, use of fake voter registration slips and double voting.

A week after the polls, the MDC still does not have an electronic version of the voters’ roll and most of its candidates did not even get a hard copy version ahead of voting. Geoff Feltoe, one of the new commssioners of the Zimbabwe Electoral Commission resigned on Monday, the second to do so since the July 31 elections.

Independent Foreign Service

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