HomeOpinionIndigenisation badly managed

Indigenisation badly managed

SINCE Zanu PF introduced the indigenisation policy in 2007, there remains a disturbing lack of clarity on its framework, thrust and direction, as well as its objectives and economic implications.

Zimbabwe Independent Editorial

When it started, the approach was to force foreign-owned companies to “cede” majority shareholdings to selected local investors, implying seizure; then it became “dispose of” suggesting fair value compensation; and now President Robert Mugabe says in mining there must not be commercial transactions at all, meaning grabbing through offsetting equity outlays and mineral claims.

This lack of precision and transparency is now manifested in the ongoing clashes between Indigenisation minister Saviour Kasukuwere and Reserve Bank governor Gideon Gono.

The battles between the two, which have sucked in Mugabe and others, clearly show there is a problem. Right from the start this was bound to happen. First there were no inclusive consultations and national consensus.

Inside Zanu PF there remained uncertainty, not about the ideological foundations of the policy but how it was going to be structured and implemented.

That confusion spread to the government and hence contradictory and sometimes openly conflicting positions taken by principals and ministers. There were invariably fights in cabinet and Council of Ministers over this issue.

To put it mildly, indigenisation has been seriously mismanaged and that’s why it continues to be dogged by allegations of patronage, bribery and extortion. This can be mostly blamed on the ad hoc approach to implementation, informed by political expediency, especially now ahead of crucial elections.

While most people agree indigenisation is necessary to address skewed economic ownership patterns and inequalities, some people are genuinely concerned about its elitist slant, corruption and fears it would destabilise an economy already struggling to recover from the impact of extended periods of mismanagement.

The recent public row over the programme between Kasukuwere, who wants an equity-based model, and Gono who prefers a mixture of the shareholding method and supply-side based approach, show a detrimental lack of cohesion and direction in the whole programme.

The acrimonious fight, which has deeply divided Zanu PF and government, is mainly centred on the ideological thrust of the policy, its conceptual basis, framework, implementation mechanisms and liaisons, valuation of companies, legislative issues, exchange rate approvals, consultation fees as well as terms and conditions of agreements.

Kasukuwere says he will forge ahead with his approach regardless of protests from his colleagues. But Gono insists he would not allow that.

Mugabe’s intervention has not been helpful. Instead of ensuring the situation is sorted out after his remarks during his recent birthday interview, he only fuelled chaos.

His statements demonstrated government is not even prepared to respect its own laws, which is why it is flagrantly flouting Bippa agreements, property rights and the rule of law.

In short, the indigenisation programme has been badly managed and this is inevitably damaging the economy.

Recent Posts

Stories you will enjoy

Recommended reading