By Antonio Guerrero
Foreign ownership of mines in Zimbabwe challenged by law
Zimbabwe's government is continuing its campaign against foreign ownership, insisting that businesses with assets of more than $500,000 must be 51%-owned by black Zimbabweans within five years of this month. The bill, known as the Indigenization and Empowerment Act, was passed in 2008 but not signed into law. It includes fines and prison sentences of up to five years for noncompliance. Major mining companies could be affected, as Zimbabwe maintains the world's second-largest platinum and chrome reserves and is an important gold, diamond and nickel producer. Ironically, the move comes as the government attempts to attract investment amid a decade-long recession. The economic downturn began when president Robert Mugabe seized white-owned commercial farms for redistribution to black subsistence farmers, slashing agricultural production and exports in the process.
The International Finance Corporation (IFC), the World Bank's private sector lending arm, plans to invest some $2.5 billion in sub-Saharan Africa during the 2009-2010 fiscal year, which ends in June, topping the previous year's $1.8 billion. The World Bank predicts the economy of sub-Saharan Africa will grow by 4.1% this year, compared with 2.5% for the African region as a whole.
The African Development Bank (AfDB) launched a three-year, $1 billion global bond issue, part of a $5.5 billion issuance program for 2010, setting a new benchmark. The issue, which follows four deals placed by the Tunis-based regional development bank last year, was led by Daiwa, Deutsche Bank, Goldman Sachs and UBS, with BNP Paribas, Credit Suisse, HSBC, Mizuho and Standard Chartered as co-leads. The deal for the AAA-rated bank was reportedly heavily oversubscribed.
The European Investment Bank (EIB) plans to take a stake in three liquidity-stressed Nigerian banks in a move that should help stabilize the nation's troubled financial sector and boost credit availability to support private sector growth. The banks are among eight Nigerian financial institutions that recently failed a central bank stress test. According to the EIB, it provided more than $1.5 billion last year to fund 29 projects in sub-Saharan Africa, partnering with other multilateral lenders.