Renowned scientist Albert Einstein once remarked that insanity was the act of doing the same thing over and over again and expecting different results.
The same could be said of President Robert Mugabe and his government’s wealth redistribution exercises. After violently seizing land from white farmers more than a decade ago and dismally failing to achieve the objectives of the land reform exercise — to distribute land to landless blacks — Mugabe’s government enacted the Indigenisation Act. Again, the policy has only engendered poverty among the intended beneficiaries of the exercise.
Mugabe’s administration, which has presided over the collapse of the country’s economy since attaining independence from Britain in 1980, must realise that capital is timid and has choices.
This is a reality which seems to have escaped Mugabe and his acolytes. And acting like Zimbabwe is the only foreign direct investment (FDI) destination in the world will further worsen Zimbabwe’s already pathetic financial position characterised by government’s failure to pay civil service wages on time and bonuses. Jus last week, Indigenisation minister Patrick Zhuwao, a relatively educated government official,vowed to amend the constitution so that the law is not challenged in the courts on constitutional grounds. In other words, Zhuwao wants legalised theft. And no right-thinking investor signs up for that. Government’s failure to pay salaries epitomises the height of failure by any responsible state. If this doesn’t jostle government into taking a hard look into itself and taking corrective action on the economic front, nothing can. Government must now take a strong position, cut its economic losses and salvage what is left of the economy. While it is evident to all and sundry that indigenisation has not met its objectives of empowering the people, those mandated by the taxpayer and general populace to steer the country into the future are keen on taking the troubled country back into the stone ages.
No right-thinking investor will commit millions let alone billions only to lose control soon after. There is need for a paradigm shift on the indigenisation policy. The policy is a monumental failure and government must admit that it has failed. Instead of empowering the people, the legislation has now become an accelerator to poverty.
Government’s failure to institute reforms on the investment front is not only worrying, but seems akin to expecting the devil to commit to telling the truth and be a regular nice guy.
Instead of making wholesale amendments to the Indigenisation Act, Zhuwao would rather levy various costs on already struggling companies to ensure they comply. At a time when all fundamentals — unemployment at around 90%, tight liquidity, the manufacturing sector in intensive care unit with capacity below 40%, dwindling tax base and no disposable incomes, the country sinking in debt — government must look at redeeming the economy through amendments to the indigenisation laws. Zimbabwe also needs US$1,8 billion to clear arrears to international financial institutions and around US$500 million in maize imports.
While it is clear the country needs FDI urgently to improve liquidity, government has not caught on to this, sadly.