The Sunday Mail
Rangu Nyamurundira
It is a breath of refreshing air into Zimbabwe’s indigenisation implementation framework; the recent appointment of Honourable Patrick Zhuwao as the minister responsible for implementing indigenisation and empowerment. The hope arises from his world-view of things as they relate specifically to Zimbabwe, which he did not shy from giving in his “Zhuwao Briefs” in The Sunday Mail.
Hon Minister, you come at a time of a besieged indigenisation and empowerment programme, under siege from within, not without. With respect, we thought only pigs are given to eating their own young should self-preservation outweigh generational common good. Alas, we have seen that despicable nature in our beloved Zanu-PF, from some within and appointed to Government.
Only a few days ago, Hon Zhuwao aptly put it, in a statement we hope amounts to reclaiming his new ministry’s long eroded yet critical mandate, that “Pane varikusakura ndima dzisiri dzavo. Varikutema chibage vachiti isora.”
Applause!
A well-intentioned “welcome” Hon Zhuwao, the fields need order.
Some comrades have been eating away at the party’s ideology and policy in Government, having declared it to now amount to weeds.
I hazard to ask if their actions amount to a second kick at “bhora musango” come 2018.
They eat at the very legitimising mandate given the party by the people of Zimbabwe in 2013, and which mandate, come 2018, the people shall most certainly audit upon Zim-Asset’s results-based management framework.
But allow me to return to the matter at hand.
The former minister responsible for indigenisation and empowerment, Honourable Christopher Mushohwe, gave some critical parting shorts we must take due note of, indeed for the continuity which indigenisation needs and was broken post-Tyson.
In The Sunday Mail edition of August 30, 2015, Minister Mushohwe asked “why anyone who is opposed to this law is not seeing it”; its legislative intent “to level the playing ground so that there is harmony and peace in Zimbabwe”; that indigenisation “creates stability — socially, politically and economically”.
If, indeed, we are a most learned people, surely those who have argued that indigenisation is scaring away foreign investment can only be doing so from feigned ignorance calculated for selfish political agenda and a toxic quick economic fix.
Our indigenisation legislation is enabling to investors, most importantly have them invest in a stable and prosperous Zimbabwe, made so by its empowered majority able to guarantee any foreigner good dividend from their share.
Such an empowered society will be most comfortable with and indeed seek out foreign investment knowing that it is guaranteed its equitable share in the wealth of its economy.
Now, to the first disabling myth.
As a transformative catalyst indigenisation was never framed “a one size fit all” but as a programme that takes due consideration balancing its statutory mandate, on one side to achieve the primary pursuit for equity control, while on the other to ensure broad participation by a society on the move toward being empowered.
Allow me to highlight important points on fact raised by the Honourable Minister and the law applying thereto. First, we have investors proposing that the 51/49 threshold could be worked out differently. This is not to say do away with our 51/49 objective, rather to be allowed gradual compliance.
Indeed the former minister pointed out that “the Act’s administering Minister can, on a case-by-case basis look at issues and periods that can be relaxed. The investor can start with majority shareholding and gradually cede shareholding.”
And there lies the meeting point and enabling provision within the law itself, whose application is long overdue. Indeed it will also reassure different sectors of the economy and their “line Ministries” whose ill informed and selfish reasoning is that indigenisation is rigid and scaring away investors interested upon their sectors.
Our 2013 electoral mandate that constituted this our Zanu-PF Government begs that you not entertain businesses and investors now running to line ministries thinking they evade indigenisation.
Dear “line ministries”, and so called “anti-FDI” peddlers, the law welcomes investors to come and even seek a “lesser share of indigenisation or longer period within which to achieve” indigenisation.
But there is a catch, a very pertinent one which investors and indeed those rightfully mandated to implement our indigenisation programme must grasp.
The catch is that there is real and measurable empowerment value to be secured from the discretion of “lesser shares” for a prescribed period only, or “longer periods” which may be given to a business or investor to comply with indigenisation.
This empowerment value is defined within the Indigenisation and Economic Empowerment (General) Regulations of 2010, whose Section 3 is to the effect that businesses must dispose of a controlling interest of not less than 51 percent “unless, in order to achieve other socially or economically desirable objectives”, a lesser share of indigenisation or a longer period within which to achieve it is justified.
The value is in the trade-off between allowing lesser share of indigenous equity for a prescribed period or a longer period to comply, but in return for securing empowerment (called “socially or economically desirable objectives”).
Ultimately our legal framework does not impose implementation dogged upon pursuit of 51 percent equity isolated from an endeavour for empowerment.
Consider an investor committing to the empowerment of youth, women or disabled persons in a sustainable and measurable way, guaranteeing at least US$100 000,00 per year.
It amounts to US$500 000,00 into empowerment by one investor over a five year period.
Such a non-indigenous business or investors can go further to identify empowerment objectives within Zim-Asset, capacitating indigenous Zimbabweans to achieve Zim-Asset targets such as increasing the national heard, honey or milk production, setting up agro processing plants to produce our own fruit juice, process avocados, etc.
Must Government not seriously consider allowing such investors effectively funding Zim-Asset “lesser indigenisation shares” for a prescribed period or “longer period to achieve 51 percent equity transfer”?
While these companies work towards compliance we could be scoring “quick wins” in the area of economic empowerment and building our “empowered society” that will in turn certainly give impetus to our economic revolution.
We will certainly not suffer prejudice from relaxing compliance with equity control, during which period of abeyance we are guaranteed funding for empowerment and sustainable development to empower our people for the final very imminent push.
The only prejudice we have suffered is that during the initial five years, between 2010 — 2015, despite Minister Saviour Kasukuwere having made significant progress and put us firmly on the rails of our economic revolution, we failed to tie up the ends to achieve an effective 51 percent equity transfer.
Therefore, not only did we “kick the ball musango”, but so too did we fail to leverage on empowerment benefits from these businesses that have resisted and frustrated equity compliance.
We could have approached these companies, whipped into line and running scared by Tyson, and asked for significant equity transfer while also appearing to give them some breathing ventilators that insist on the balance in equity being temporarily converted into empowerment credits while we sort our post-Kasukuwere raffled house in order.
Those five years are gone, opportunity lost, and a revolution taken a step back. Now we embark upon another five year implementation period, 2015 — 2020.
Shall we be the wiser, so as to unlock the full empowerment capacity that lies within the provisions of our indigenisation legislation?
Allowing a lesser share of indigenisation only for a prescribed period, or a longer period within which to achieve compliance does not amount to abandoning of our primary objective of indigenising and owning our economy.
An economic revolution by its nature requires more calculation and refined strategies, moreso in the Act’s call to “endeavour to secure” majority ownership and control.”
To endeavour is to embark upon a process or journey along which smart strategies are devised and re-strategised, all towards a constant and unchanging primary objective which in our case is an “empowered indigenous society” and its “growing economy”.
Rangu Nyamurundira is a lawyer and advocate for Government’s indigenisation programme and its establishing of a new indigenous economy founded upon an empowered indigenous society.
