HomeBusiness DigestMugabe threatens new price blitz

Mugabe threatens new price blitz

Kuda Chikwanda

PRESIDENT Robert Mugabe yesterday threatened to launch a new blitz targeting producers and businesses which he accused of hiking prices of basic commodities without government approval.

Speaking at the Zanu PF Extraordinary Congress, Mugabe said he was worried by the recent spate of price increases. He said appropriate action would be taken on errant businesses.

“I want, finally, to warn them (businesses) that unless they themselves are disciplined, a discipline that is recognised by us (as government), we might have to take action against them,” he told thousands of delegates.

Mugabe said government would continue to implement measures to turn around the economy and that government would not stand by and watch Zimbabweans suffering.

“Government will continue to take more measures to turn around the economy but we want to ensure that our people have a good Christmas,” he added.

Mugabe’s threat seemed to support National Incomes and Pricing Commission (NIPC) chairman Godwills Masimirembwa who was forced to eat humble pie by Reserve Bank of Zimbabwe (RBZ) governor Gideon Gono three weeks ago.

Masimirembwa was diplomatically whipped into line by Gono after he threatened to unleash the second phase of the blitz. Most businesses are yet to recover from the devastating effects of the controversial price blitz launched in July.

Gono told the business community that he believed that Masimirembwa —whether or not he had issued the threat — had been misquoted and assured the business community that there would be no return to the “madness” that characterised the blitz in July and resulted in widespread shortages of basic commodities.

Mugabe also indicated that the Mines and Minerals Amendment Bill was still on the way and reiterated that government wanted majority stakes in all foreign owned companies.

“We have said before that we need investment in the mining sector, expertise in the sector, but not at the expense of the people. That is why we came up with the Mines and Minerals Bill,” Mugabe said.

“We will insist on equity in precious minerals for the majority of our people. The majority of shareholding will be held by our people; 51% of investment in precious minerals should be held by Zimbabweans.”

Mugabe also said government was opposed to indigenous people being used as fronts by foreigners to circumvent the 51% ownership whilst retaining benefits for the foreign investor.

“We do not want blacks to be fronts in ‘partnerships’. If you are fronts we say no! We want you to be rich owners, it must be a true partnership,” Mugabe added.

The Mines and Minerals Amendment Bill seeks to enable government or indigenous people to take up 51% of mining companies, especially those mining precious minerals.

The Bill provides for government to acquire 25% of every mining company engaged in the extraction and exploitation of strategic minerals or precious stones without paying for it.

The Bill allows for government or other indigenous investors to pay for the remaining 25% with Section 54 of the Bill proposing explicitly that the state or indigenous people hold a controlling interest in all mining companies.

At least 10% of the shares of a mining company must be owned by the state or indigenous investors within the first two years, while at least 20% of the shares should have changed hands within the first five years.

Companies engaged in the extraction of strategic minerals must ensure that at least 40% is owned by the state or indigenous investors no later than five years from the Bill becoming law, while the threshold of 51% is reached within seven years.

The Mines and Minerals Amendment Bill was drawn up two years ago but was sidelined as the Indigenisation and Empowerment Bill picked up steam and was passed into law recently although it awaits Mugabe’s assent.

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