Once again, it’s gloves off between Indigenisation minister Saviour Kasukuwere and Reserve Bank governor Gideon Gono, with neither party pulling punches.
Candid Comment with Itai Masuku
The battle reached fever pitch this week when Gono issued a statement assuring Standard Chartered Bank Zimbabwe customers their bank would not be closed for failing to comply with indigenisation requirements as had been threatened by the National Indigenisation and Economic Empowerment Board last weekend.
In essence the fight is over Kasukuwere’s equity model for indigenisation versus Gono’s supply and distribution empowerment model. The former is advocating radical indigenisation, while the latter is advocating moderate empowerment.
The two concepts are quite separate, as we have mentioned before. In simple terms, indigenisation implies accessing milk by taking over the cow, while empowerment implies accessing the milk by leaving the cow under its current owner, but allowing others to buy the milk, but make money by building the cow shed, maintaining it and other things necessary to keep the cow alive.
At the level of ordinary level Biology, indigenisation is like osmosis while empowerment is like symbiosis. Osmosis is the movement of molecules (economy) from areas of low concentration (foreign shareholders) to areas of high concentration (the indigenous populace) through a semi-permeable membrane (the indigenisation law).
Symbiosis is the mutual existence of organisms (foreign and indigenous people) for mutual benefit. The challenge with osmosis is that it depends on whether the area of higher concentration beneficiates the areas of low concentration.
A living example is the ongoing debate on the sidelines as to whether the old PF Zapu really benefited from being osmotised into Zanu PF.
Similarly, the symbiotic relationship has challenges in that in the mutual existence some animals may be more equal than others.
Kasukuwere is right in his crusade for enfranchisement of the majority and has the indigenisation law on his side.
However, Gono is also right in his sentiments that the current equity model could cause instability in the financial sector.
“Destabilising a large bank such as Standard Chartered has serious systemic consequences that can lead to unintended results which are opposite to those that we would have hoped to achieve,” Gono says.
He cites many acts which must be complied with if the indigenisation programme in its current form is to be properly implemented.
These include The Exchange Control Act and Regulations Chapter 22:05, The Reserve Bank Act Chapter 22:15, Procurement Act Chapter 22:14, Public Finance Management Act Chapter 22:19, the Corporate Governance Framework for Parastatals, The Arbitration Act Chapter 7:15, Mines and Minerals Act Chapter 21:05 (if it’s a mining entity) and The Companies Act Chapter 24:03.
In particular, he quotes The Reserve Bank Act, Chapter 22:15 Sections 6 (1) which in Section (c) requires the central bank to : foster the liquidity, solvency, stability and proper functioning of Zimbabwe’s financial system and Section (e) to supervise banking institutions and promote the smooth operation of the payment system in Zimbabwe.