Indigenisation clash ongoing

via Indigenisation clash ongoing | The Zimbabwean by Farai Mabeza

Central Bank Governor Gideon Gono and Indigenisation Minister Saviour Kasukuwere’s clash on indigenisation is set to continue following remarks made by Gono in Bulawayo recently.

He pointed out that Zimbabwe needed foreign direct investment to solve its liquidity problems. He told the business community that in order to attract FDI, the country must not be seen to be fighting owners of capital.

According to indigenisation requirements, foreign-owned companies should cede 51 percent of their shareholding to local ownership. Gono has proposed an alternative model of indigenisation to the one championed by Kasukuwere. Kasukuwere wants an equity-based model while Gono prefers a mixture of the shareholding method and supply-side based approach.

According to the central bank chief, the equity model does not lead to broad-based economic empowerment. He said it is better to force the foreign-owned companies to do most of their procurement with locally-owned enterprises.

Economist, Eric Bloch, told The Zimbabwean that foreign direct investment was critical for the turnaround of the national economy.

“It is absolutely critical. Without it we have no prospect of economic recovery. We don’t have the capital resources to develop the country,” he said.

Bloch pointed out that the importance of FDI was not just in the flow of capital but in gaining technological knowhow.

“FDI is the number one critical requirement to turning around the economy,” he said.

Gono and Kasukuwere have also been at loggerheads over the indigenisation of foreign-owned banks. Kasukuwere accused Gono of being the country’s most corrupt person, saying he was taking bribes from foreign owned banks in exchange for protection.

Gono said financial institutions were sensitive and should not be affected by the policy. Outgoing Finance Minister Tendai Biti agrees with Gono and feels the sector is already indigenised.

Zimbabwe National Chamber of Commerce President, Hlanganiso Matangaidze, told The Zimbabwean that the business sector needed to focus on the right industries.

“I am sure we can unlock the potential in Zimbabwe. Diamond cutting and polishing is a new industry but it is an industry that has potential for growth,” he said.

President Robert Mugabe admitted that Kasukuwere has made mistakes in designing and implementing the indigenisation policy.