There’s every reason to be afraid . . . very afraid

LAST week, President Mugabe was taken to the Zimplats mining complex in Ngezi where he got a tacit reminder of the benefits of f

oreign investment and big business’ contributions to community development.

The president saw a US$19 million road that the mining giant built in the area, a power line constructed and handed to Zesa, workers’ houses, and a water reticulation system. The company has also built a police station, expanded a school and put up a fibre optic line and ancillary equipment in the area.

This exhibition of a functioning mini-economy in Mashonaland West was in stark contrast to the pervasive gloom in the rest of the economy. From the seat of government in Harare, the president and his colleagues in Zanu PF have told us that foreign-owned mining firms are milking the economy and that locals are not benefiting from the exploitation of mineral resources, hence the need to amend mining legislation to ensure locals benefit. President Mugabe has proposed legislation that will see foreign-owned mining firms ceding 50% of their stake to indigenous players or government. The legislation has not yet been tabled before parliament but Mugabe, after touring the Zimplats plant, started proposing “amendments” to a law that is yet to see the light of day.

Mugabe told investors at Zimplats that they should not be “frightened” by the proposed legislation because the law only seeks to ensure the miners “plough back into communities they operate in” which he commended Zimplats for having already done.

“So do not dread us…We are not there to take that which is not ours,” Mugabe promised.

There is a problem here. What sort of statute would give such guarantees to investors? In fact, it would be an administrative nightmare to legislate the thresholds of ownership structures based on companies’ corporate social responsibility programmes.

But more importantly, it would be naïve for would-be investors in the mining sector and those already doing business here to derive comfort from the presidential assurances. Government’s history of deception and outright dishonesty should provide a warning.At the inception of the land reform programme in 2000, government assured the world that land reform was all about fairness and equitable distribution of wealth. Agriculture minister Joseph Made said the criteria for expropriation was derelict or underutilised land, land under multiple ownership, foreign-owned land (land owned by foreigners for holiday or speculative purposes), and land adjacent to highly-congested communal areas. 

Coffee, tea, sugarcane and timber plantations were exempted.  Farms belonging to church organisations, missions and wildlife conservancies were also exempt as were lands under bilateral agreements with investors.  Made said since commercial farmland adjacent to communal areas was a top priority, “in those rare cases where a white commercial farmer only had a single farm … government would acquire the farm but in return the owner was invited to choose any other property that the government had already acquired and the owner could relocate there at government’s expense”.

President Mugabe, in an article published in New African magazine in September 2002, said: “We shall always welcome and respect loyal citizens or residents who co-operate with government and respect our policies and decisions. Many farmers have relocated in compliance with our one-farmer, one-farm policy. No farmer has been rendered landless on this principle. Only the greedy ones are complaining.”

Can there be any greater dishonesty, looking at the state of affairs in the farming sector?

There are agro-industrial firms like Hippo Valley Estates whose land is being expropriated despite its huge investment in infrastructure and social services in Chiredzi. Kondozi Estate, at the heart of development in Odzi, which employed more that 5 000 workers, was expropriated, looted and run into the ground. Business has come to a jolting halt in agricultural towns and service centres which once thrived on well-organised commercial agriculture. Disinvestment in the mining sector would be a major blow.

Remember this Mugabe warning to farmers in his New African article: “We cannot allow those who plot our ruin to continue to make rich pickings here. Let the hostility of their actions turn into the costs they deserve.”

Like white commercial farmers who opposed chaotic land reform, mining firms which will stand up to oppose the legislation could easily be branded hostile and made to face the “costs they deserve”.

There is every reason to be afraid. And no room whatsoever for the investor confidence which we are told is key to economic recovery.

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