Zimbabwe to sell firms to Eastern countries if E.U. imposes sanctions

THE Zimbabwean government will sell companies owned by Western countries to local companies and ‘friendly’ Eastern countries if the European Union imposes sanctions against the government of Zimbabwe, according to weekend reports from the country.

The E.U. has indicated that it will impose further sanctions against Zimbabwe when it meets on Tuesday this week.

According to press reports over the weekend, the Zimbabwean government has started ‘auditing’ all Western firms in a bid to transfer ‘unfriendly’ ones to investors from Eastern countries.

A report in the Sunday Mail suggests that this move will be “part of a black empowerment drive ‘and to counter the possible withdrawal of investment under sanctions imposed and proposed by Britain and the U.S.’”

Presidential spokesman, George Charamba in response to this drive indicated that ‘government is not sleeping’ and will have to come up with measures to counter sanctions against the country.

This is despite the fact that many Western companies have indicated that they will not withdraw from the country, including Anglo American which is going ahead with a US$400 million mining investment. Barclays Bank Plc. has also indicated that it will not leave Zimbabwe.

Although some British investors had so far rebuffed a call by London to pull out of Zimbabwe, Mugabe was taking no chances, the newspaper said. Oil giant Royal Dutch Shell Plc. pulled out of Zimbabwe last month and was replaced by more ‘friendly’ company - South Africa's Engen Petroleum which bought Royal Dutch Shell’s 50 percent stake in a joint venture with British Petroleum.

According to the Sunday Mail, a high-ranking government said these companies would also be targeted for takeover by “local investors and companies from friendly countries, particularly those in the Far East, should they heed calls by the U.S. and European governments for them to disinvest from Zimbabwe."

E.U. diplomats indicated last week that member states will agree on Tuesday to impose tougher sanctions against Zimbabwe.

They are set to increase the number of officials and businessmen associated with President Mugabe subject to visa bans and financial sanctions.

The E.U. refused to recognize President Mugabe's re-election last month after a run-off in which the opposition leader, Morgan Tsvangirai boycotted.