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‘Sanctions too big a toll for Zim’

JOSEPH Kanyekanye (JK), the Group CEO of Allied Timbers became the president of the Confederation of Zimbabwe Industries (CZI) after succeeding Kumbirayi Katsande. Kanyekanye has in recent times become a controversial figure because of his hard-line stance on economic sanctions imposed on Zimbabwe by the United States.

This week Zimbabwe Independent Senior Business Reporter Bernard Mpofu (BM) speaks to Kanyekanye on the political and economic factors affecting local industry.

BM: How has your first year as CZI president been?

JK: It has been hectic in the sense that I came into office when the Global Political Agreement was signed. Part of the challenge was convincing the business community to accept that this is a relationship that has come by. Imperfect as it might seem in some circles, that is something that could help Zimbabwe move forward and we needed our members to support it and give it enough goodwill so that we can have growth. It was then prudent for us to engage political players, particularly government officials with a view of ensuring that we have a platform for Zimbabwe to have economic growth and revival of industry.

BM: How successful were some of these engagements?

JK: I will classify them into different categories. We have met with the prime minister almost on a monthly basis and we have also met with ministers from the two MDC’s and Zanu PF. We have also met diplomats and business delegates from outside Zimbabwe. If you look at politicians, I think it has been quite successful. When you look at industry and commerce, particularly, the ministry under professor Welshman Ncube, we have come to a position where there are literally very few points of disagreement among us because it is like we are  two hearts beating as one.
We had a few problems after the original indigenisation regulations because they caused a fright, not only on local Zimbabwe business but also to the foreign investors because they come through us occasionally and we hear a lot of things.
While that caused fright, I am happy that through engagement with minister Saviour Kasukuwere and the indeginisation board and so forth, a lot of people are now clear that indigenisation is not necessarily anti-business. BM: Does CZI have any re-industrialisation policy in place?

JK: We have made our proposal to government. We have done our industrialisation policy as an advocacy group but government comes up with the final policy position. I am glad that government is working on that. I have seen the paper and it is very good.
Essentially, our sense as CZI, is we must define areas that we have core competencies. For example, my own industry wood and furniture. Some of our manufacturers manufacture furniture that is found in Disneyland. There is also agriculture, particularly tobacco farming. I feel that this is an area that responds quickly if you inject some funds. We believe that there are quick-win businesses that Zimbabwe is known for. We should identify such industries, focus on them and make sure that resources are channeled towards them.

BM: How much is needed by local industry?

JK: About US$3 billion will do the trick within a period of two years. I think the sooner the better. What I would urge is that you need to do this simultaneously with agriculture because 60% of products from local industry is used in agriculture and almost 40% of the raw material that goes into industry comes from agriculture.

BM: Interestingly, you mentioned agriculture. Is this sector ready for that, given the emotive issue surrounding land tenure?

JK: I will be very blunt with you and not partisan. As far as I’m concerned, land ownership in agriculture is a done deal. There may be others who think otherwise but I don’t subscribe to that. Issues around whether you want a lease or a title deed are fundamentally to do with ensuring that there is something you can use to fund agriculture. When you look at the generality of all the sectors of agriculture, the issue of leases and title deeds become critical when you want to expand the source of funding not coming from the state. Suffice to say, there are issues in agriculture but the issues are more to do with how it is funded as opposed to change of ownership.

BM: What is CZI’s position on economic sanctions imposed on Zimbabwe?

JK: Our position came after resolutions of the 2010 congress. It is very clear and it reads: “In light of our support for the Government of National Unity as well as our drive to achieve sustained economic recovery, it is our view that sanctions are inappropriate and not in line with GPA principles. Industry to engage protagonists to remove these.”

BM: Can industry quantify the potential losses that have resulted from these sanctions?

JK: It will be difficult but I can only say it is too big a toll for this country to be carrying. I can make reference to African Growth Opportunity Growth Act (Agoa) countries like Botswana, Namibia and Swaziland accessed American markets free of duty. They were able to increase employment and growth. I want anyone to come and challenge me that under Agoa, Zimbabwe was put under sanctions because I do not see why the country should have not benefited if there were no sanctions. For me a compromise would call it restrictive sanctions.

BM: Still on sanctions, particularly Zidera, some critics argue that trade between Zimbabwe and the US improved after the enactment of the law. They also say the sanctions came after the country made accruals to Brettonwood institutions. What do you say to this?

JK: I have heard that argument from the American ambassador and it doesn’t hold water. The impact of sanctions is not just measured by trade between two countries and I think that is one major weakness in that argument. If the ambassador were to look at it closely, he must give you what actually happened between Zimbabwe and the US thereafter. Up to 2002 it is true that there was an increase in trade but it has since gone down.

BM: Apart from sanctions ,what other problems do we face as a country?

JK: Zimbabwe fundamentally has four main challenges — debt being the most critical; Western skepticism; national interest permeates through the different religions, politics and even business. The fourth is our ability to engage.

BM: Is CZI ready for general elections slated for next year?

JK: Frankly speaking, business has supported the GPA. It was our hope as business that the inclusive government would go much longer assuming it is functioning. But if it does not function, what room is there. If you can not have the budget coming through, then we have got a problem. My idea is that if the GPA can function, then clearly we will be content with that for some time. But if it shows the signs that we are seeing now, where it looks like things are not functioning well and there is some sort of dissonance, then clearly an election may be the ideal thing provided it is done in a manner that the outcome is respected by almost everyone else. That outcome must be such that it allows business to operate. Generally, business do not like elections because when they do happen they take away our time and generally productivity suffers.

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