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Zimbabwe May Introduce Empowerment Levy on Foreign Companies

Zimbabwe may introduce a levy on foreign and white-owned companies to pay for the training of unemployed black Zimbabweans, Indigenization Minister Francis Nhema said.

The southern African nation has said its law on local ownership, which requires companies to sell or cede 51 percent of shares to black Zimbabweans, may soon be amended to encourage investment into the cash-strapped country.

“The emphasis has to do with training of our people by companies,” Nhema said by phone today from the capital, Harare. “This will assist the unemployed and those who did well at school.”

Zimbabwe’s economy is entering a fresh recession after four years of stability, and may shrink by about 1 percent this year, Harare-based independent economist John Robertson said May 27. A severe liquidity crisis has left government struggling to pay wages, while factories are operating at just 40 percent of capacity.

The country’s benchmark Zimbabwe Industrial Index has slumped 12 percent this year, the worst among 14 African stock markets tracked by Bloomberg.

The ruling Zimbabwe African National Union-Patriotic Front’s politburo met this week to order Nhema to make the indigenization law “less confusing and more attractive” to investors, Information Minister Jonathan Moyo said June 4.

‘Investors Happy’

“Right now investors are happy with what we’re doing,” Nhema said. “The response from investors has been good — a greater understanding of what we’re trying to achieve.”

Miners including Anglo American Platinum Ltd. (AMS), Impala Platinum Holdings Ltd. (IMP) and Aquarius Platinum Ltd. (AQP) have indicated to the government they will comply with the 2010 law and give some shares to community trusts.

“I’m not ready to discuss the finer details yet, but non-exploitive industries outside mining and agriculture can negotiate the percentage they allocate to indigenous Zimbabweans,” Nhema said.

That would leave lenders such as Barclays Plc (BARC) and Standard Chartered Bank Plc free to negotiate levels of local ownership, University of Zimbabwe economist Tony Hawkins said May 29.

Bloomberg

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