Zimbabwe moves on foreign firms

Harare, 02 March-(ANA)-A new Zimbabwean law that forces foreign-owned companies to sell a majority stake in their businesses to indigenous people has come into effect.

Overseas-owned firms worth more than $500,000 (£332,000) will have five years to sell a 51% stake, upon the threat of jail sentences.

The new rule - dubbed the indigenisation law - is seen as an extension of the government's seizure of white-owned farms, which started approximately 10 years ago.

The move to target foreign-owned firms has further divided Zimbabwe's already strained unity government.

President Robert Mugabe has repeatedly defended the law, saying that foreign firms would be "foolish" not to comply.

By contrast, Prime Minister Morgan Tsvangirai, has rejected the law, saying it was published without due process.

The main trade union group, the Zimbabwe Congress of Trade Unions (ZCTU), has warned that the new law could have negative consequences.

"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," said ZCTU president Lovemore Matombo. (ANA)

FA/ANA/02 March 2010------