Indigenisation discord ruinous

THE withdrawal of the indigenisation amendments this week, a fortnight after being gazetted by Finance minister Patrick Chinamasa, is the clearest sign yet of the confusion and discord within government.

FAITH ZABA

Finance minister Patrick Chinamasa presenting the 2016 national budget

Finance minister Patrick Chinamasa presenting the 2016 national budget

That the decision, a huge blow to investment, came after an ugly spat between Chinamasa and Indigenisation minister Patrick Zhuwao makes it all the more embarrassing. These are two ministers who traditionally sit together in Cabinet every Tuesday failing to agree publicly over the indigenisation policy which was signed into law by President Robert Mugabe way back in 2008.

Chinamasa gazetted the ame ndments on Christmas Eve which were meant to clarify the indigenisation law and give a clear indication to the international community that Zimbabwe is ready for business.

However, the fissures in government became apparent when Zhuwao, on Christmas Day, when families were gathering to celebrate the day, hastily convened a press conference savaging Chinamasa, accusing him of treachery.

Although they jointly addressed a press conference on Monday this week saying they had finally agreed on the amendments, the damage had already been done.

The message sent was that this is a confused government with ministers who do not let the right hand know what the left hand is doing.

If anything, it is now patently clear factionalism is deeply rooted in Zanu PF at all levels as a result of succession manoeuvres spawned by the perennial question of who will succeed Mugabe, which remains unanswered.

Chinamasa and Zhuwao are reportedly on opposite sides. While the Finance minister is linked to the faction led by Vice-President Emmerson Mnangagwa, Zhuwao is a key member of the group of young Turks working with First Lady Grace Mugabe referred to as the Generation 40 (G40).

The tragedy is not only that two ministers publicly differed so spectacularly over a law enacted eight years ago, but that the showdown will scare away investors government is so desperate to partner.

This begs many questions; why would an investor want to come to a country where gazettes are dismissed in such unreasonable fashion and withdrawn altogether? Why would an investor risk ploughing millions of dollars into a country ruled by a confused government that seems to be operating on auto-pilot?

It is ironic that the end of the inclusive government, which Mugabe called a three-headed monster because of differences in policy and idealogy among the three parties — Zanu PF, MDC-T and MDC — has not stopped the squabbles in Cabinet. If anything, they have intensified at a time Zanu PF has two thirds majority in parliament and a clear mandate to rule.

The devastating impact of the endless haggling in government, especially on the indigenisation law is reflected in levels of foreign direct investment.

The United Nations Conference on Trade and Development World Investment Report 2015 shows that Zimbabwe remains an economic backwater with paltry FDI inflows of US$545 million in 2014. This paled in comparison to neighbouring countries in the Sadc region such as Mozambique, which received US$4,9 billion, almost nine times more, South Africa (US$5,7 billion) and Zambia (US$2,4 billion).

Sadly, the public fight only serves to buttress the view by investors that government is not serious about attracting foreign direct investment.

Worse still, the proposed 10% indigenisation levy for “non-compliance” is not only a deterrent to foreign investment but will also burden already struggling companies and lead to more closures.

Concerns over the indigenisation laws seem to continuously elude government if the cat and mouse game it plays on the issue is anything to go by.

That most business delegations that have come into the country have all pointed to the law, should signal to government the need to expeditiously amend it without running around like headless chickens.

Mnangagwa spoke of the need for the country to come to the party and join the League of Nations.

At this rate, getting onto that table will remain a pipedream.

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