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Harare Revives Defunct Entities To Take Over Firms Deemed 'Saboteurs'

The government of Zimbabwe said it has revived the Zimbabwe State Trading Corp. and the Zimbabwe Development Corp. to take over firms it deems to be “sabotaging” the economy by refusing to produce goods at prices dictated by authorities.

Industry Minister Obert Mpofu was quoted in the state-run Herald newspaper as saying Z$30 billion (US$200,000) funding has been provided. But legal experts said there is as yet no legal basis for such takeovers or nationalizations.

Mpofu was said to have told business leaders that the government would get “rid” of owners but retain staff. This follows government's tabling in parliament of legislation providing for it to acquire a 51% stake in all white-owned companies in the country on behalf of black Zimbabweans in the name of "indigenization" of industry.

Economist Tony Hawkins, a professor at the University of Zimbabwe Graduate School of Management, told reporter Patience Rusere of VOA's Studio 7 for Zimbabwe that the problem is not who is running firms but a dire shortage of foreign exchange.

More reports from VOA's Studio 7 for Zimbabwe...