The southern African country’s indigenisation laws restrict foreign companies to a maximum of 49 percent stake of a business with the remainder reserved for Zimbabweans.

The government is also entitled to a free 25 percent shareholding in precious minerals such as gold, diamond and platinum, and strategic minerals such as coal and coal-bed methane.

The controversial indigenisation laws have sent jitters among foreign investors with some scaling down operations or withdrawing from Zimbabwe completely as the country’s economy suffered under a decade-long recession.

Zimbabwe is now under a coalition government formed in February between former political rivals President Robert Mugabe and Prime Minister Morgan Tsvangirai.

The Harare administration has said it requires US$10bn to revive the collapsed economy and attracting foreign investment is vital to raise production as Zimbabwe tries to recover.

Mpofu told an investment conference in Harare that the review would lead to legislation more focused on investment.

“Careful consideration will be taken to ensure that the process of indigenisation is not at the expense of the much needed direct foreign investment,” he said.

“We are back to the drawing board at stakeholder consultation stage where submissions of all the views of interested parties are now being sought again in order to address all the concerns.”

Zimbabwe has launched a review of all mining contracts, saying it would introduce a “use it or lose it” policy.

“In doing so we want to ensure that all those that are performing will not be prejudiced,” said Mpofu. “We are doing it in a manner that will not frighten people away.”

With the agriculture sector in turmoil, mainly as a result of Mugabe’s government’s seizures of farms from whites, mining had become the largest employer and earned more than half of the country’s foreign currency. – ZimOnline

Finance minister Tendai Biti told investors at a conference in Harare yesterday that revenue collected from taxes has jumped from US$66,8 million collected in May to the new figure, indicating steady economic growth since the formation of the inclusive government in February.

With entirety of the civil service outside the minimum tax threshold of US$150 per month, government revenue has grown from US$4,7 million in January, US$15 million in February, US$44 million in April and US$51,6 million the following month.

Altogether government has collected revenue amounting to US$185,3 million during the first half of the year.

Biti attributed the surge to a 30 percent growth in the real sector – mining, manufacturing and tourism.

Biti also told investors that capital markets had also grown as reflected by the 66 percent growth of the Zimbabwe Stock Exchange during its few weeks after resumption of trade in foreign currency in February.

Biti also advised the private sector to participate in productive capacity and infrastructural development through Public Private Partnership and Build Operate Transfer programmes.

Biti’s remarks came two weeks before his maiden midterm fiscal policy statement, which is expected to introduce new tax measures amid reports that government would introduce a proper remuneration for the civil service. The introduction of proper salaries on government workers will result in the suspension of US$100 allowances paid across the board since beginning of the year.

Sources said the Finance Minister is also expected to announce the new Reserve Bank of Zimbabwe board after the tenure of the existing board expired. The announcement of the new board could be part of Biti’s Cabinet approved plan to reform the central bank.

It is yet to be known whether Biti would adopt advice given to government by applied economics professor Steve Hanke who met Prime Minister Morgan Tsvangirai in Washington during his three-week tour to re-engage with the United States and Western Europe.

Hanke, a renowned monetary expert with the Cato Institute of the John Hopkins University advised government through a pre-recoded video at the conference to adopt wide-ranging reforms modelled along those of Singapore after independence in 1964.

“The first thing I would like to do is focus a little bit on the vision thing, that the vision I think will be appropriate for the economic sphere for Zimbabwe and to do that I will be talking about Singapore,” Hanke said

He said government could also adopt a “flat tax” regime of about 10 percent to stimulate economic activity.

“The only thing I can say in terms of policy are two things that government officials should stop talking about going back to the Zimbabwe dollar, essentially you now have the world’s premier currency in place. It’s working now and it has stabilised the economic situation immediately. I think as far as the eye can see you should retain dollarisation now. It should be retained in an official way.”

Foreign aid, Hanke said had been a “general failure” due to corruption and mismanagement of “privileged contractors”.

Paul Robinson, an investment analyst working for Laurium Capital said South African investors were keen in investing in consumer-focused listed companies with bigger and more liquid shares.

“Investors are currently waiting and seeing the economic developments in Zimbabwe but they remain cognisant if not missing investment opportunities. We are also eager to make comparative analysis of financial results for listed companies now that reporting is now being in foreign currency.” – ZimOnline

“The IMF staff mission will look into the country’s economic performance since the setting up of the incluisve government in February,” an official close to the delegation told AFP.

“The delegation will, among other things, hold meetings with government officials and representatives of industry.”

The IMF mission is the third since the start of the year, and follows the fund’s decision last month to resume technical aid to Zimbabwe, which for years had been barred any assistance.

The rest of the IMF team will arrive within a week, and the mission is set to wrap up its work on June 29, officials said.

According to the IMF, the team will assess foreign exchange inflows and the state of international reserves and will meet with the World Food Programme about the country’s food needs.

The mission will also discuss the United Nation’s 718-million-dollar humanitarian appeal that includes food aid for six million Zimbabweans — about half the population.

In February, long-time rivals President Robert Mugabe and Prime Minister Morgan Tsvangirai formed an inclusive government following a deal brokered by former South African president Thabo Mbeki.

The new government is seeking 8.5 billion dollars to revive the shattered economy and the civil service, including schools and hospitals, but major Western nations have withheld aid demanding to see more significant political reforms.

Tsvangirai met on Friday with US President Barack Obama at the White House, but left with little new aid.

To date, the new government has raised over one billion dollars mostly coming from African organisations, but that includes little direct financial support of the government.

The southern African country currently owes the IMF 133 million US dollars.

According to the IMF, Zimbabwe’s economy has been shrinking for years, contracting by 6.1 percent in 2007. This year, the finance ministry predicts the economy will grow by at least four percent.

-AFP.

      According to documents made available to this newspaper, Trust entered
into an arrangement with Bract Investments Limited, a company registered in
the United KIngdom, which deposited and transferred funds from its account
with HSBC Bank PLC in the United Kingdom to the local financial institution’
s accounts in Germany and the UK.

      Funds were deposited into Trust Bank’s account with Commerz Bank in
Frankfurt, Germany, numbered 40088182300, and to the financial institution’s
UK account with National Westminster Bank, numbered 04594185.

      The transactions, amounting to £500 000, took place between June last
year and March 2003.

      An official with an agency representing Bract in Zimbabwe said the
deal between the UK company and Trust was supposed to enable Zimbabweans
living abroad to send money to their relatives back home.

      The money would be deposited by Bract into Trust Bank’s off-shore
accounts in Germany and the UK, and the local financial institution would
then convert that money into Zimbabwean dollars at parallel market rates and
transfer it to the Bract agent in Zimbabwe.

      “Trust Bank Corporation was paying the transferred amounts in
Zimbabwean dollars at rates varying from $1 800 to $2 400 for each pound,”
according to a letter written to the
      CID Fraud Squad by Chibune and Associates, legal representatives for
Bract Investments Limited.

      The Zimbabwean dollar: British pound rate was fixed at $1 300 in
February when the government devalued the local currency.

      It was not clear why Bract had decided to bring the transaction to the
attention of the Zimbabwean police, but in their letter, dated 9 April 2003,
the UK company’s lawyers said they believed that the transactions
contravened sections of the country’s exchange control regulations.

      “We are of the view that the above transactions contravened various
provisions of Part II and IV of the Exchange Control Regulations SI 109 of
1996 as well as some provisions of SI 110 of 1996 as apparently there was
externalisation of funds and dealing on the parallel market by Trust,” the
lawyers said.

      “Our client is willing to avail themselves in Zimbabwe,” the letter
added.
      The lawyers also provided documents detailing dates of transactions,
bank branch codes from which the funds were transferred and the amounts
involved.

      Although police sources this week said the Fraud Squad had approached
Trust about the transactions, the head of the Fraud Squad in Harare, who
identified himself only as Assistant Commissioner Nyakochwe, yesterday
refused to comment.

      He referred all questions to police spokesman Wayne Bvudzijena, who
too declined to comment.

      Steve Chibune of Chibune and Associates also would not discuss the
issue, saying he could only do so after receiving instructions from his
client.

      Chris Goromonzi, Trust Bank’s executive director, confirmed that there
was a dispute
      involving his bank’s off-shore accounts, but would not provide
details.

      However, a prominent lawyer in the banking sector, who spoke on
condition of anonymity, said if Trust Bank was found guilty of contravening
exchange controls, it could be suspended or fined to enable the country to
recover the money it had been prejudiced of.

      He said the bank, one of Zimbabwe’s fastest growing financial
institutions, could also lose its licence for contravening sections of the
Banking Act.

      Zimbabwe is facing a severe foreign currency crisis and the Reserve
Bank of Zimbabwe has taken a tough stance against companies externalising
hard cash. The central bank has warned banks against illegal foreign
currency trading, saying they could be fined or have their licenses

The State represented by Chengetai Gwatidzo, of the Attorney-General’s Office, had opposed bail, saying Bezuidenhout’s life was in danger since the situation at his farm was still tense with tempers still high. He said there was a fear that Bezuidenhout might abscond or interfere with State witnesses because of the seriousness of the charge. Gillespie directed the farmer to report at the Harare Central police station every Friday and not to interfere with witnesses whose names might appear on a list to be supplied by the investigating officer. Bezuidenhout, who was not in court, was represented by Advocate Richard Phillips of Advocates Chambers instructed by Chris Ndlovu of Gonese and Ndlovu. Phillips successfully argued that his client’s life was not in danger as he had safe alternative residential addresses.