Tsvangirai dismisses foreign banks ultimatumBy KITSEPILE NYATHI in Harare | Wednesday, July 4  2012 at  17:14

Zimbabwe Prime Minister Morgan Tsvangirai has told foreign-owned banks to ignore a directive by the country’s empowerment ministry to cede a 51 per cent of their stakes to locals saying it is not government policy to take over the financial institutions.

Indigenisation minister Savior Kasukuwere last Friday gazetted new regulations giving foreign-owned banks one year to hand over their majority shareholding to locals as part of President Robert Mugabe’s empowerment crusade.

The directive set in motion plans by government to also take over baby care centres, primary and secondary schools as well as institutions of higher learning owned by white Zimbabweans and foreigners.

But on Wednesday, Mr Tsvangirai’s spokesperson Luke Tamborinyoka said the directive had not been approved by Cabinet and was unlawful.

“The Prime Minister would like to inform the public and the concerned stakeholders that there is no such government position because no such issue has been discussed and agreed upon by Cabinet,” he said in a statement.

“The Indigenisation and Economic Empowerment Act does not empower the minister to act and to project an image of a voracious government keen to compulsorily grab almost all institutions and companies in the country.”

He said the minister, who is from President Robert Mugabe’s Zanu-PF party, had overstepped his mandate by issuing the notice.

“The minister has not issued a Statutory Instrument but a notice which in itself is unlawful and the contents of which are ultra vires the Act,” Mr Tamborinyoka said.

“The national economic interests of Zimbabwe demand a proper policy that creates jobs for the millions of unemployed people in the country.”

Illegal moves

Finance minister Tendai Biti has also dismissed the regulations as a non starter.

He said he would hold a joint press conference with Reserve Bank of Zimbabwe governor Gideon Gono once he returns from a foreign trip to calm the situation.

Mr Kasukuwere accuses foreign banks of refusing to support local business leaving the burden to poorly resourced local financial institutions.

“Foreign banks are safe because they deny you funding …so we have got to transform them,” he said last week.

Meanwhile, Education minister David Coltart also described as illegal moves to seize private schools and colleges.

“The idea behind the Empowerment Act is to empower disadvantaged Zimbabweans; how can you enrich someone by giving him a non-profit making institution,” he told the state owned Herald newspaper.

“This has come to me as a surprise and since there is no such Cabinet policy, I hope most members of the Cabinet would not buy such an idea.”

President Mugabe’s coalition government is divided on the implementation of the empowerment law, which has already seen mining companies surrendering their majority stakes to locals.