...one gets the
impression that the approach to its development and application has been
ad-hoc, piece meal and lacking in international consistency. It has been a
product of circumstances and at times mainly of politicians reacting to
unfavourable economic situations and the demands of small groups of business
individuals who felt that the prevailing economic conditions put them in an
unfair position vis-a-vis the foreign competitors. It was hardly the original
work of development planners, although their involvement became inevitable
after political decisions have been made[1].
Introduction
The business share holding
structure especially of multi-national companies in Africa has in general been
subject to various changes. Governments in Africa have introduced policies and legal
enactments that have included nationalisation, black empowerment policies and
Black Empowerment Enterprises[2].
With particular reference to Zimbabwe, the government in 2007 promulgated the Indigenisation
and Empowerment Act. In response to these developments in various African
countries, Leslie Rood summarises that basically the main intention is that, “Africans
want control in their own house”[3]. The basic borne of contention that requires enormous
debate and serious interrogation with particular reference to Zimbabwe, is on
the methodology, implementation and the monitoring mechanism of the policy.
Such questions become
more pertinent and relevant given the Zimbabwe’s political and economic context.
The country having been perversely affected by the structural adjustment
programs in the 1990’s has faced serious economic challenges that contributed
significantly to the crippling of the industrial sector[4].
The political expediencies that followed soon after the 1995 had a well felt
crunch on the general populace in Zimbabwe. Amongst such expediencies was the land
redistribution program, unplanned military expenses[5],
gross human rights abuses in violent clashes and a series of pseudo military
operations in the form of Murambatsvina[6].
Such cases contributed significantly in putting the country in the radar of
constant scrutiny from the international community. This also led to decreased
investor’s confidence thereby leading to declined business transactions.
Such state of affairs
cannot be ignored especially when the aspect of indigenisation and empowerment
is discussed. It becomes a central topic in ascertaining how the Act can
spearhead economic recovery, create more business opportunities and become a
sustainable base for the future economy of Zimbabwe. Additionally, how has
there been a deliberate inclusion of women and the youths.
Rationale
and debates
The Indigenisation and
Empowerment Act was passed through parliament in 2007. The Act amongst other
things underlines the allocation of 51 percent shareholding to the local indigenous
Zimbabwean on all companies that have a net threshold of $ 500 000. Some of the
business enterprises that are directly affected by the Act given the threshold
include, Standard Chartered Bank, Zim Platinum, Rio Tinto, Nestle, Cargill,
Meikles, British American Tobacco and other mining companies.
Such companies
therefore, are required by the law to submit their change of ownership to the
Ministry of Youth Development, Indigenisation and Empowerment within the
limited period of time upon receiving notification. The companies in their plan
are supposed to show how they intend to cede 51 percent of their shares to
indigenous Zimbabweans, of which such a plan is set to be fully implemented
within a period of 5 years. The plan is also subject to adjustments and
approval from the Indigenisation Board.
Various interlocking
factors can be proffered in ascertaining why the government particularly aimed
at carrying out indigenisation at this particular stage. According to
Aljazeera, the move towards indigenisation was part of a plan to hit back at
countries that have imposed sanctions on President Robert Mugabe[1].
However, such claims have been generally overlooked and instead arguments that
have been proffered underline the aspect of attempting to restore the economic
imbalances that had characterised the Zimbabwean economy.
Based on this overview the chief proponents of
the Act pointed out the importance of ensuring that Zimbabweans soon after
being reallocated land become the majority share holders of foreign companies.
They further argued that this will therefore ensure that the past colonial
economic imbalances are duly addressed and the black Africans get to make
influential decisions regarding the major companies.
Such an issue was
further premised on the already completion of the land reform program. Perhaps
it is worthwhile to note that the momentum towards the Act was underlined by
the slogan of “100 percent Total Empowerment”. As such, offering shares to the
Zimbabweans was premised as contributing to empowerment and contributing
towards total economic independence of the Zimbabweans.
According to David
Manyae[2],
economic transformation is inevitable but the problem in Zimbabwean case is
that such transformation is never ending. Political expediency has been at the
focal point and generally clouded economic decisions that implemented. The
timing of the Act and its current implementation can be viewed as a way of
shouldering off MDC and making ZANU PF be viewed as a party spearheading
economic gains to its citizens. It is within this context that David Manyae
further indicates that ZANU PF has portrayed itself through its clever wits as
pan-Africanist party that promotes black empowerment, and at the same time has
used various forums to de-campaign MDC portray them as proponents of the West
who are against black emancipation. Therefore, it becomes pivotal to view this
as a political tool meant for electioneering and feeding in the broader
objective of votes.
Munyadzi Murove when exploring
BEE in South Africa, raises an interesting introspect that further deserves to
be included in the Zimbabwean context. He points out that such move are an
attempt to domesticate western capitalism. This comes after failing to come up
with our own mainstream economic base that targets and uplifts the Africans.
Therefore, pushing local governments into “legalised looting”, through
indigenisation Acts. The challenge therefore in this context, is that instead
of contributing towards a black empowered population the move creates a class
of African capitalists that slowly turn into modern indigenous black colonists.
Who in turn end up replacing the old order they have removed. It is within such
appreciation that Claude Ake, indicates that:
Those who end up
benefitting from government economic intervention
are in favour of black empowerment
(and they) are mostly in solidarity
with international capitalism rather
than with their own fellow African
poor[3].
Far from being ignored
such debates have to be fully appreciated in length and possible solutions
enacted to prevent the cycling of the so called transformative initiatives by
the government.
Major
Pointers of the Indigenisation and Empowerment Act in Zimbabwe
One of the major
pointers of the Act is on the major beneficiaries being indigenous Zimbabweans.
An indigenous Zimbabwean is defined by the Act as “person who before 18th
April 1980, was disadvantaged by unfair discrimination on the grounds of his or
her race, and any descendant of such a person”[4]. This
has likelihood of indirectly excluding the youths as according to the Act they
have to prove that they have been descendants of war veterans. It is critical
to point out that those that are said to have contributed towards the
liberation of the country stand to have a have stake in the indigenisation
program.
Another pointer in the
Act has been the formation of a board that is left at the discretion of the
minister of youth development, Indigenisation and empowerment. Though a
deliberate attempt from the Act was made to identify strategic groups like
representatives from women, youths and those living with disabilities, of
concern to the youth constituency and other like minded individuals are the
selection criterion used by the ministry. Additionally of concern is the enormous power given to the minister as
in implementing the whole Act. Given his political affiliation some other
interests groups are bound to be deliberately excluded owing to their political
association.
The establishment of
the Fund is another issue that can be flagged from the Act. The Fund is set to
be administered through Board and will be used to finance the whole Act. The
ministry therefore has to impose levies meant to wholesomely finance the fund.
Such levies therefore are set to be the lifeblood of indigenisation and
Empowerment Act.
Its
Implementation and Progress thus far...
Since the inception of
the Act, there have been general mixed feelings regarding the Act. However, of
interest has been the failure of companies in following the prescribed Act.
Tension has been largely noted in the mining sector with some miners failing to
comply with the set legal instruments. According to Saviour Kasukuwere, “ some
companies were dilly dallying and we are no longer going to negotiate with
them”[5].
In attempting to identify the chief cause of this it is worthwhile to note that
the mining industry generally invest billions of dollars towards the extraction
and also, most mining companies have been involved in community development
initiatives. In that regard, some miners have been suggesting that such
developments further ought to be translated empowerment credit. This is a case
which the government has failed to clearly allocate and consequently
incorporate in buying 51 percent of the company shares.
A delay in the full
implementation of the Act has been due to controversy clouding the
implementation. Some companies have been complaining that the intensions and
transfer of ownership of infrastructure has not been fully cleared, hence
contributing to most companies eying the whole move with suspicion. Such
pre-judgemental attitude further owes to the governments previous policies that
were not clearly specified and implemented for political expediency.
Of critical importance
to note is the fact that the process of indigenisation is clouded in such
controversy amongst the general public. Ironically, enough supporters of ZANU
PF have assumed that the Act gives them leverage to quickly occupy any foreign
owned company and start managing the company as if they are the sole owners.
Such can be evidenced through ZANU PF youths particularly occupy buildings that
have been foreign owned and recently a bird sanctuary under the guise of total
empowerment and indigenisation. Such moves can be used as clear evidence that
the issue of indigenisation even within its chief proponents has not been fully
appreciated. Therefore, raising eyebrows in the implementation of the
indigenisation and empowerment Act as a black economic empowerment tool.
[2]
David Monyae is a political analyst based in Johannesburg.
[3]
C. Ake; Historical and Theoretical Background: The Political Context of
Indigenisation. In Adebayo A: Indigenisation of African Economies,
pg. 32.
[4]
See, Indigenisation and Empowerment Act, Part 1, pg 2.
[5]
See Chronicle of Friday 24 February 2012.
[1]
A. Adedeji: Indigenisation of Africa,
[2]
See BEE in South Africa.
[3]
www.jstor.org/pss/159743.
[4]
See J. Herbst ; The Structural Adjustment Politics in Africa, New
Jersey, Princeton University, 2002.
[5]
Inference is made towards the military expedition in DRC as well as the War
Veteran liberation financial packages.
[6]
See a report by AK Tibaijuka ,
entitled Report of the fact-finding
mission to Zimbabwe to assess the scope and impact of Operation, 2005 on www.aif.web.aparte.dk
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