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Zimbabwe poll politics hurting investment- Tsvangirai

Zimbabwe's demand that foreign companies turn over majority stakes to locals is being driven by upcoming...

Movement for Democratic Change leader Morgan Tsvangirai in Harare on 25 June 2008. Picture: Taurai Maduna/Eyewitness News

Zimbabwe's demand that foreign companies turn over majority stakes to locals is being driven by upcoming elections and scaring investors away, Prime Minister Morgan Tsvangirai said on Thursday.

Mining firms, banks and retailers have grown increasingly worried about the law, pushed by Tsvangirai's rival and coalition partner, President Robert Mugabe.

"It is political rhetoric," Tsvangirai told an investment forum in Johannesburg. "The indigenisation law as it currently is - there is no talk of nationalisation. There is no talk of grabbing property."

Tsvangirai said politicians can make promises of bringing riches to the masses, but the law states market prices must be paid for the stakes in foreign firms and there is not enough money in private hands to make that happen.

"Our people don't have the necessary resources to buy the equity that currently exists in the economy," he said.

Zimbabwe's economy was a basket case, with inflation running at astronomical levels, before a coalition was formed between Mugabe and his long-time foe Tsvangirai after a disputed election in 2008.

The deal helped stabilise the economy and reverse a decade of steep decline but progress could be dashed by national elections required by next year under the power-sharing agreement.

Tsvangirai said his coalition partners "have twisted a very noble cause" of empowering poor blacks.

"This is a price that we are paying as a coalition government of no shared vision and no shared values," he said, adding that the mixed message was "a proper recipe for turning away investors".

Analysts see a more sinister side to the indigenisation law, which they feel will be exploited by Mugabe's ZANU-PF party to squeeze money out of foreign firms to finance its election campaign and employ thugs to intimidate voters.

Mugabe, in power since the country gained independence from Britain in 1980, and top ZANU-PF officials have been hit with international sanctions for suspected political violence and killing campaigns to stay in power.

"This is a price that we are paying as a coalition government of no shared vision and no shared values," he said, adding that the mixed message was "a proper recipe for turning away investors".

Analysts see a more sinister side to the indigenisation law, which they feel will be exploited by Mugabe's ZANU-PF party to squeeze money out of foreign firms to finance its election campaign and employ thugs to intimidate voters.

Mugabe, in power since the country gained independence from Britain in 1980, and top ZANU-PF officials have been hit with international sanctions for suspected political violence and killing campaigns to stay in power.

Timeline

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