Corporate Foreign Policy has recently reported that Zimbabwe’s government has proposed that “indigenous Zimbabweans” take 51 percent ownership of all foreign companies, including mines and banks, according to a draft law. While the report later went on to quote an official at the Chamber of Mines, expressing surprise and concern at the proposed legislation, it must be noted that he is not alone in the tone of his response.

This recent proposition proves the following:

i. Economic conditions that at one point were seemingly on the rise are headed for a violent spiral.

ii. Governance in Zimbabwe is as erratic and detrimental to progress as it ever was.

iii. Robert Mugabe’s ideology burns through even the flimsiest of united fronts.

The draft regulations said indigenous Zimbabweans should hold a controlling interest in each foreign-owned business with an asset value above $500,000. Zimbabwe passed an Indigenisation and Economic Empowerment law in 2007, which seeks to transfer control of all firms — including mines and banks — to black Zimbabweans.

The Arcadia Foundation agrees with the many analysts that this is no different a strategy than the original seizure of white-owned farms in 2000, which has since dramatically cost the former breadbasket of Africa. Further initiatives stemming from dated ideology would again unsettle investors and could further damage an economy already ravaged by the collapse of commercial agriculture.

A unity government formed by Mugabe and his rival, Prime Minister Morgan Tsvangirai, promised in February to be flexible in applying such empowerment laws, but the proposed regulations suggest no change of tack.

Shocked by this, truly. The Arcadia Foundation will be providing in-depth analysis of the dramatic changes in Zimbabwean policy and their immediate domestic ramifications as they occur.