Mugabe Prepares to Take Over Banks, Mines as Isolation Deepens

By Brian Latham

Dec. 23 (Bloomberg) -- Zimbabwean President Robert Mugabe is preparing to take over key businesses in mining, banking and manufacturing as his international isolation deepens, two members of the ruling party’s politburo said.

The 84-year-old leader said two days ago that he may form an “Economic Revolutionary Council” to overcome sanctions, the officials said. They declined to be identified because the talks of his Zimbabwe African National Union-Patriotic Front party two days ago weren’t public. Meantime, a South Africa opposition party called for African nations to join the sanctions.

Mugabe’s plans suggest he doesn’t intend to bow to calls to step down as the economy collapses and cholera spreads. The top U.S. envoy to Africa, Jendayi Frazer, said Dec. 21 that Mugabe has “lost it.” Zimbabwe is in its tenth year of recession, with an annual inflation rate of more 230 million percent and an unemployment rate more than 80 percent.

“We are seeing the endgame,” Marian Tupy, an Africa analyst at the Washington-based Cato Institute, said yesterday. “It’s an indication of how short of money Mugabe is.”

The emergency measures would seek to curb inflation and lift productivity, which has slumped to less than 10 percent of manufacturing capacity, the officials said after the meeting in the northeastern town of Bindura. These may include nationalizing banks, mines and factories and could go as far as declaring a state of emergency, they said.

Impala, Rio Tinto

Impala Platinum Holdings Ltd., the world’s second-biggest platinum producer, and Rio Tinto Group, the world’s third-largest mining company, own assets in the country. Barclays Bank Plc and Standard Chartered Plc operate in Zimbabwe.

The Zimbabwean government has already said it plans to force foreign companies to sell 51 percent of their assets to black Zimbabweans. It has yet to implement that decision.

Calls to the offices and mobile phones of Mugabe’s spokesman, George Charamba, Justice Minister, Patrick Chinamasa, and Information Minister, Sikhanyiso Ndlovu, weren’t answered.

While Zimbabwe is not the subject of formal economic sanctions, the U.S. and the European Union have imposed travel bans and asset freezes on Mugabe and his allies.

Mugabe has resisted a power-sharing agreement brokered by former South African President Thabo Mbeki in September after presidential run-off elections in June were boycotted by the opposition Movement for Democratic Change. Talks over enacting the deal have stalled because of his refusal to give up key ministries.

“Credible power sharing” with Mugabe isn’t possible, said Frazer, the U.S. official.

Cut Off Supplies

Calls from South Africa for sanctions against Mugabe, the only leader Zimbabwe has had since independence from Britain in 1980, are growing.

Mugabe’s neighbors should cut off supplies of commodities to force political change, said Mosiuoa Lekota, the leader of the South Africa’s Congress of the People party, known as Cope. Cope was formed by dissidents from the ruling African National Congress after Mbeki was ousted as president. Lekota is a former ANC chairman and defense minister.

“It’s no good to mouth beautiful slogans, there must be implementation,” Lekota said in an interview in Johannesburg yesterday. “Simply refusing supplies of commodities” to Zimbabwe could spur political change.

To contact the reporter on this story: Brian Latham via the Johannesburg office at asguazzin@bloomberg.net