PRESIDENT Robert Mugabe’s statement on Tuesday to clarify the indigenisation law is the clearest sign yet of the confusion within government and its inability to resolve the issue once and for all.
Candid Comment Faith Zaba
The toxic policy has over the years resulted in ministers of finance and central bank bosses, on one hand, publicly clashing with indigenisation ministers on the other, thereby scaring away foreign investors. The clarity the foreign investors want means cleaning up the regulations so that they are not vague and open to various interpretations. Finance minister Patrick Chinamasa’s public clashes with the overzealous Indigenisation minister Patrick Zhuwao is a case in point. The two have clashed several times on the interpretation and compliance with the law in different sectors of the economy.
On Christmas Eve last year, Chinamasa gazetted amendments, which were meant to clarify the indigenisation policy, signed into law by Mugabe way back in 2008. This was meant to give a clear indication to the international community that Zimbabwe was ready for business. However, barely 24 hours later, Zhuwao savaged Chinamasa, accusing him of treachery. Even though the ministers later told journalists they had finally agreed on the amendments, the damage had already been further done.
Barely four months after the ugly spats, the two ministers clashed again a fortnight ago over the compliance of the financial services sector, with Zhuwao pushing for foreign owned banks to relinquish at least 51% shareholding to locals or face closure. However, Chinamasa stated that banks had complied by the March 31 deadline and submitted satisfactory plans.
This is not the first time that Mugabe has intervened to end a row between his ministers over the controversial policy. In August 2013, he sought to clarify the policy, saying the 51/49 equity model Zanu PF has been pursuing remains the framework, but there would be flexibility in other areas outside the resource-based sectors.
This week, Mugabe admitted that the law was causing confusion and hurting the country’s chances of attracting foreign investment. Once again, Mugabe’s remarks trashed the one-size-fits-all approach zealously pursued by Zhuwao and his predecessor Saviour Kasukuwere.
The statement came as Chinamasa and Reserve Bank of Zimbabwe governor John Mangudya are in Washington DC for the International Monetary Fund and World Bank annual spring meetings.
If Mugabe’s statement was made to hoodwink the international community that the country is keen on economic reforms, it is a pathetic attempt. The fact that every now and then, Mugabe has to repeatedly clarify the empowerment laws, shows that it is bad law and needs to be repealed. The country cannot have a law which even cabinet ministers cannot interpret.
Unfortunately, Mugabe’s attempt does not bring finality to the issue. What investors fear is that the law can be amended as and when Mugabe wishes as his statement reveals. This means that there is no certainty and it is subject to arbitrary changes. One of the basic principles of law is certainty — this law is the direct opposite of that and it must therefore be repealed forthwith.