Zimbabwe has just bought a company it does not need for $40 million, in the name of indigenisation

Zimbabwe has paid Amsterdam headquartered Vimpelcom $40 million for a 60 percent stake in telecommunications operator Telecel. Information Communications Technology Minister Supa Mandiwanzira told a committee of parliament the government had raised the money from National Social Security Authority (NSSA), a state-run national pension fund. Many question the decision of the government to spend $40 million on a company it does not need at a time the country’s economy is struggling. More so, the government is running NetOne, the second largest network operator in the country at a loss. However, Mandiwanzira claims the purchase was beneficial to Zimbabwe.

Zimbabwe had given foreign firms until April 1 to meet 51 percent local-ownership targets, failing which they would be ejected and have their assets seized. The Indigenization and Economic Empowerment Act, which was passed in 2008 under President Robert Mugabe’s black empowerment drive, requires foreign companies to sell at least 51 percent shares to locals. Read more on this and other stories from Zimbabwe.