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Mugabe changes indigenisation policy

Only foreign companies using raw materials from inside Zimbabwe will be obliged to hand over 51 percent.

President Robert Mugabe has announced a significant shift in his controversial indigenisation policy. Picture: AFP.

HARARE, Zimbabwe - President Robert Mugabe has announced a significant shift in his controversial indigenisation policy.

In a speech to mark Zimbabwe's 34th anniversary of independence the 90-year-old president revealed only foreign companies that exploit raw materials from inside Zimbabwe will be obliged to hand over 51 percent of their shares to local businesspeople.

This announcement does appear to be a significant toning down of ZANU-PF's indigenisation policy and that's something that will be welcomed by Zimbabwe's anxious foreign business community.

Mugabe told crowds gathered at Harare's National Sports Stadium yesterday that there had been confusion over the policy.

He said that the 51 percent share handover obligation only applied to big companies that were exploiting Zimbabwe's natural resources in the mining, agriculture and manufacturing sectors.

The president said if a company was using raw materials from outside Zimbabwe, it wasn't right to force them to hand over a majority of their shares.

The indigenisation policy states that all foreign or white-owned firms worth over five million rand have to hand over a majority share holding to black Zimbabweans, but critics including the opposition Movement for Democratic Change (MDC), say it scares away foreign investment.