BULAWAYO, Zimbabwe (AFP) – Zimbabwe's new local ownership law, requiring locals to own 51 percent of major foreign firms, could hurt the nation's economic recovery, the main labour body said Monday.
The law took effect Monday, giving companies valued at more than 500,000 US dollars 45 days to inform the government of the racial make-up of their shareholders.
The companies will be given five years to comply with the 51 percent rule.
"Although the principle of the law is good, we fear that this could lead to a creation of new minority blacks who will just replace the minority whites," Lovemore Matombo president of Zimbabwe Congress of Trade Unions told AFP.
"The law should have not been rushed, we are just coming out of a self inflicted economic crisis.
"This law could create fears that the process could be chaotic just like the land reform, which will affect the economic recovery of the country and we do not need this right now as we need investments," said Matombo.
Zimbabwe President Robert Mugabe, in power since independence in 1980, launched a chaotic land reform scheme in 2000, taking over white-owned farms to resettle with blacks.
The programme was meant to redress colonial-era inequities, but was marred by widespread political violence and resulted in plunging output, decimating the farm-based economy and leaving the nation dependent on foreign food aid.
The new ownership law was passed by parliament in 2007 but was only published as law last month.
Prime Minister Morgan Tsvangirai, Mugabe's partner in a strained unity government, has rejected the law, saying it was published without due process. But Mugabe has repeatedly defended the law and said foreign companies would be "foolish" not to comply.
*AFP
