Harare - Zimbabwean Prime Minister Morgan Tsvangirai Wednesday condemned the country's new law requiring foreign-owned firms to give a majority stake to blacks as 'warped'.
Investors have raised concern the new indigenisation law which required foreign companies worth more than 500,000 dollars must sell a majority of their equity to Zimbabwean blacks by 2015.
The law was passed in 2007, before President Robert Mugabe's Zanu PF party formed a coalition with Tsvangirai's Movement for Democratic Change party.
'The flawed nature of the current indigenisation policy and our toxic politics proved to major issues affecting investor confidence,' said Tsvangirai of his recent trip to the US where he had gone to lure investors to his troubled country.
'The warped indigenisation policy has eroded investor confidence and created a sceptical international business community that has developed a wait-and-see attitude.'
He told journalists that the situation in Zimbabwe would only stabilise when an election has been held and a clear government policy on investment in the African nation was outlined.
Tsvangirai has maintained that the law could scare away badly-needed foreign investors. It is seen by some as a controversial extension of Zimbabwe's policy to seize white-owned farms.
The law's critics argue that most Zimbabweans are too poor to own stakes in companies that might require injections of capital. They fear that the equity will end up in the hands of wealthy officials.
On Monday country's empowerment minister, Savious Kasukuwere, an ally of Mugabe told German Press Agency dpa the law would still be enforced.
Foreign firms operating in Zimbabwe - which include mining groups and banks, including Rio Tinto and the British financial giant Barclays - were required to submit their plans to Harare by last Sunday.
On Tuesday a government body appointed by Kasukuwere said about 700 foreign companies had missed the deadline to submit proposals on how they would comply with the controversial law and risked having their licences cancelled or suspended.
source:monstersandcritics.com
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