Mugabe defends sale of foreign firms to locals

BULAWAYO: Zimbabwe's President Robert Mugabe defended Saturday new regulations to give locals majority share-holding in big corporations, saying they were meant to correct historical imbalances.

The law takes effect on Monday and allows 45 days for companies valued at more than 500,000 US dollars to sell 51 percent stakes to locals.

"Our indigenisation policy, like the land reform programme, is meant to correct historical imbalances in the ownership of our resources," Mugabe told hundreds of supporters at his 86th birthday celebrations.

"This policy is not meant to nationalise companies but to broaden ownership of our resources," he said during the lavish party in Zimbabwe's second city of Bulawayo.

"Yesterday, we were down trodden, there was slavery... Back home, the people were colonised and turned into slave and semi-slave to do work for masters who had colonised us.

"It was slavery in the colonies and that is what created the imbalances," he said.

The Indigenisation and Empowerment Bill was passed by parliament in 2007 and signed by Mugabe in 2008, before the creation of a unity government with his long-time rival, Prime Minister Morgan Tsvangirai.

Tsvangirai has rejected the law, saying it was published without due process.

It will affect the local operations of companies such as Standard Chartered Bank, Barclays and platinum mining giant Zimplats, among others.

Business leaders fear it will result in a flight of capital and hamstring Zimbabwe's efforts to attract foreign investment, desperately needed to help recovery from a decade of economic free-fall that impoverished the nation.

Under the unity government, Zimbabwe last year posted 4.9 percent economic growth, the first time the economy grew since 1997.

The "indigenisation" policy has been compared with a controversial land reform programme launched 10 years ago.

The land programme has been blamed for a slump in food production in the former regional breadbasket because the majority of beneficiaries lacked the means and skills to farm.

According to the United Nations, 15 percent of Zimbabweans will need food assistance this year.