Zimbabwe empowerment furore aimed at coming vote

By Marius Bosch

JOHANNESBURG (Reuters) - An intensified push by Zimbabwe's government to force foreign-owned companies to turn over majority stakes to locals is being seen as politicking ahead of elections expected early next year and could end in a compromise to avoid a return to economic chaos.

Ministers loyal to President Robert Mugabe's ZANU-PF party have been ramping up calls for foreign companies to relinquish control of 51 percent of their local operations to Zimbabweans, a move analysts say is linked to drumming up votes.

The targeted companies range from the local unit of Britain's Barclays to Zimplats, owned by South Africa's Impala Platinum -- the world's no. 2 platinum producer.

At stake are assets worth billions of dollars. The total value of Zimplats' proven platinum resources and estimated reserves at current prices is around $175 billion.

Investors and foreign companies are unsure if they will be compensated if they give up the stakes. Even if compensation is offered, many wonder how the government can afford it with foreign debt already at 115 percent of GDP.

"It is still uncertain whether the 51 percent will be paid for. I have a lot of money to invest but unfortunately with the current policy it will not happen," said one executive at a recent mining conference in Harare.

Zimbabwe's Indigenisation & Economic Empowerment act was signed into law in March 2008 before its last disputed election and is now used by ZANU-PF to portray itself as fighting for the interests of black Zimbabweans.

"It has been signed into law before but never enforced. It has also been a legislation that interestingly has been introduced during times of election campaigning. This time is no different, as the Zimbabwean government is anticipating elections," said Mark Schroeder, sub-Saharan Africa analyst at U.S. think-tank Stratfor.