8217;s indigenisation programme has been on a roller-coaster since its inception in 1992. At meetings held at the Victoria Falls and the Sheraton a group of local businessmen sold their empowerment programme to a government in search of a policy.
Zanu PF, bereft of its socialist mantras after structural adjustment, decided that if there was to be capitalism in Zimbabwe it should be capitalism with a black profile. They bought the package being touted by the Indigenous Business Development Centre (IBDC), the first flag-bearer of the empowerment cause.
Although the IBDC later fragment-ed amidst much rivalry, indigenisation has remained a central thrust of government policy. But how successful has the policy been in terms of Zimbabwe’s growth and diversity?
The majority of the founding members of the IBDC are now successful entrepreneurs running billion-dollar empires including banks, transport firms, telecommunications concerns, as well as exporting entities.
They include Ben Mucheche (Mucheche Investments (Pvt) Ltd — a transport and farming empire), Strive Masiyiwa (Econet Wireless Holdings — a telecoms empire), Enoch Kamushinda (Metropolitan Bank — a commercial bank), John Mapondera (Farirayi Quality Foods and Fiat Uno — a major exporter and vehicle supplier), and Chemist Siziba (Cosmos — a telecommunications services and equipment supplier).
In its hasty endeavour to allocate portions of the economy to indigenous businessmen, government has often been hoodwinked by its officials taking advantage of privileged information to enrich themselves.
Yet indigenisation was meant to be a way of balancing the efficient management and competitiveness of the economy with opening up equal access to business opportunities.
It has been used successfully in other developing countries to reduce poverty and to transfer knowledge to once-marginalised people. Malaysia’s programme of empowering Malays in an economy dominated by ethnic Chinese is an example of diversifying skills and ownership.
But in Zimbabwe the indigenisation thrust seems to have ushered in a new breed of entrepreneurs who owe their new-found wealth to their proximity to a politically-connected elite.
Parastatals which had been slated for privatisation continue to be run by individuals who owe more to their links to government and the ruling party than business acumen. They are incurring billion-dollar losses monthly but blame the economic climate.
Analysts say for indigenisation to work it should be carried out in a transparent manner through the intermediary of independent institutions because it is supposed to economically empower indigenous Zimbabweans generally, not a favoured handful.
They say economically empowering the population could be done by increasing indigenous business ownership of productive investment thus creating wealth which would allow disadvantaged Zimbabweans to participate in economic development by being directly involved in wealth-creating enterprises.
The analysts say democratising the ownership of the economy could also be achieved by affording the majority an opportunity to participate in economic activities, thereby eliminating racial and class differences arising from economic disparities.
Major international conglomerates including mining giant Anglo American Corporation (Anglo) and soft-drinks heavyweight Coca-Cola Central Africa have offloaded huge chunks of shares to various consortia in Zimbabwe.
Locally, blue-chip firms such as Delta Corporation Ltd, TA Holdings Ltd, Zimbabwe Sun Ltd, and Haddon & Sly Ltd also allowed their shares to change hands in a bid to concentrate on “core business”.
Insiders point out that this is healthy and normal in an unpredictable economic environment such as that prevailing in Zimbabwe characterised by hyperinflation, and foreign currency, electricity, and fuel shortages.
They say, however, because international conglomerates usually need the go-ahead from the host government, it is easy for senior government officials to quickly form consortia to snap up shareholding in such companies.
Anglo disposed of shares worth $3,2 billion (US$3,9 million) in its gold subsidiary, the company’s pyrite operation, Iron Duke Pyrites, as well as the loss-making National Foods Holdings Ltd (Natfoods).
Anglo sold 21% of Natfoods to Takepart Investments (Pvt) Ltd, a company owned by a consortium of indigenous businessmen who include prominent politicians.
Anglo also sold 52,9% in loss-making Bindura Nickel Corporation Ltd to another consortium known as Mwana Africa Holdings (Pty) Ltd for US$8 million. Coca-Cola offloaded its Schweppes subsidiary, also to a consortium of indigenous entrepreneurs.
Observers are quick to point out that while it is not a crime for cash-rich individuals to move in whenever an opportunity arises, it becomes extremely unfair when this is done at the expense of small entrepreneurs trying to venture into business and eke out a living.
Since the introduction of indigenisation, political heavyweights and those connected to them have flexed their muscles and wrestled away various projects from small entrepreneurs to feather their own nests.
Of late a number of indigenous businessmen have bought shares on the Zimbabwe Stock Exchange in a move described by observers as “cleaning money”.
The observers say a number of businessmen who benefited from government loan facilities over the past two years have used it for speculative purposes, including buying shares on the ZSE.
There are also others who looted property and machinery from farms at the height of farm invasions to amass wealth which is now being laundered on the stock exchange.
There was an uproar in parliament this year when the so-called $100 billion fund for small-scale entrepreneurs set aside by Herbert Murerwa in his 2003 national budget was allegedly parcelled out to individuals with links to the government.
While Shuvai Mahofa, the deputy minister responsible for allocating the money to deserving individuals, denied that there was favouritism in the fund’s allocation, eyebrows were raised as to why the money was being disbursed from Zanu PF offices where the “vetting” was also being conducted.
Zimbabwe’s indigenisation programme has been guided by various economic recovery policies crafted by government almost every four years to tackle the economic malaise.
These policies have included the Economic Structural Adjustment Programme (Esap I and II) (1991-1995), Zimprest and the Millennium Budget announced on October 21 1999, the Millennium Economic Recovery Programme (Merp), the National Economic Recovery Programme (Nerp), as well as the latest National Economic Revival Programme (Nerp).
Former Industry and International Trade minister Nkosana Moyo, before he quit government, stirred a hornet’s nest when he said: “Divisions, party political one-upmanship and any abuse of influence — be this by government, the private sector, civil society, or by the labour movements — with regard to commitment to and the implementation of these programmes, will only serve to deepen the hole into which we — as a nation — have dug ourselves.”
Moyo said for Zimbabwe to stop sinking the country simply “needs to stop digging”.
The major opposition Movement for Democratic Change (MDC), which government accuses of being “overly pessimistic”, says after 23 years of Zanu PF rule, Zimbabweans are poorer now than they were in the early 1970s.
The MDC says the much talked about indigenisation and privatisation programmes only benefit individuals aligned to Zanu PF and government.
The United Nations ranks Zimbabwe as one of only five countries in the world whose Human Development Index is lower today than in 1980, when Zanu PF took office.
Government, on the other hand, continues to insist that the playing field is even and its indigenisation programme a success. However, critics insist that crony-capitalism has not broadened the economic base of the economy or made a material contribution to recovery. Rather it has become part of the problem.