Scrap indigenisation policy: Analysts

via Scrap indigenisation policy: Analysts – DailyNews Live by Thelma Chikwanha  13 APRIL 2014

Government needs to stall the indigenisation process and change some of its economic policies and implement practices that will resuscitate the economy, analysts have said.

The indigenisation policy compels foreign companies to cede at least 51 percent ownership to Zimbabweans in a move which has spooked foreign investors.

Analyst canvassed by the Daily News on Sunday said Zimbabwe, which is currently experiencing a severe liquidity crunch, should put in place measures to attract Foreign Direct Investment (FDI) which is expected to give the economy the boost it badly needs.

Rashweat Mukundu, a media consultant, said while it was noble to initiate the policy where government hopes to realise at least $7,3 billion from the indigenisation of 1 138 companies across 14 sectors, the economy was in a resuscitation phase where many companies reeling from the effects of the liquidity crunch needed investment to stay afloat. “The demand that foreigners cede the majority shareholding when the economy is almost collapsing does not seem to work, and is akin to putting the cart before the horse,” Mukundu said.

“Indigenisation must be more of wealth creation than wealth grabbing. As we have seen by now, no Zimbabwean has benefited from the 51 percent policy and as many companies are closing and retrenching.”

Maxwell Saungweme, another analyst, believes the policy which government hopes will unlock capital in the economy should be moderated or stopped all together.

“But it will be a bit naive to think that just halting the policy will get the country out of the current economic quagmire,” he said.

“There is more needed. The country at present needs a huge injection of foreign capital to jump-start and sustain the economy.”

Saungweme said if the policy was shelved, it would indeed give good pointers to foreign investors but there was need to deal decisively with corruption which has contributed to the economic decline.

“You also need to decisively deal with corruption and send the right signals to investors that the country does not tolerate corruption as corruption dissuades investment by increasing the cost of doing business,” he said.

“You also need to look at the taxation policies of the country as our taxes are too high and investors shun us for Mozambique, Zambia etceteras, countries that have more attractive tax regimes.”

Government needs to create a semblance of rule of law and respect for basic human rights as serious investors are not attracted to lawless states, he added. “You also need to create good incentives for Zimbabwe’s human capital abroad to come back home and provide the skills required at a lower rate than what the country pays to expatriates,” he said.

“We also need to open up our borders by removing most tariff and non-tariff barriers to free flow of goods and services and trade.

“Issues like the corruption at the borders and the long time it takes to clear goods at the borders present some form of non-tariff barriers that discourage investors.

In short there is more required to rejuvenate our economy than just moderating the indigenisation policy.”

Tafadzwa Matiza, a researcher with the University of Limpopo said the country needed to undergo a rebranding exercise and shake off the “bad boy identity” to attract investors.

Pedzisayi Ruhanya, a media and political analyst, said the indigenisation policy was political election propaganda message that was largely a slogan.

“It cannot be taken seriously because economies and day-to-day administration of the State are not premised on propaganda and corrupt practices,” Ruhanya said.

“It is now clear that it was never a policy but a propaganda act by the regime.”

 

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13 comments on “Scrap indigenisation policy: Analysts
  1. Roving Eagle says:

    These analyst are putting too much emphasis on one solution which govt does not even have much control over – foreign direct investment. What if the investment does not come? I think even as there is dire need for foreign direct investment, maximum efforts must be on other areas that make FDI a resultant benefit rather than this direct appeal for FDI. For instance the country should be exerting maximum effort for quantum improvement leaps in corruption index rating. Given the soft handling of salarygate, recycling of same ministers for decades, appealing for FDI when the same tested and failed people are in charge is simply a joke.

  2. John Thomas says:

    ZANU cannot fix the economy. They are the disease. Getting rid of them is the cure

  3. Jack says:

    So the plan is to let those foreigners and whites build up their businesses and then take the 51%. That’s a good idea, what owner wouldn’t do that?

    It is often a mistake to think that your enemy is as stupid as you.

  4. CD says:

    FDI = Colonisation
    Colonisation = Exploitation
    Therefore FDI = Exploitation

    • Nkiwane (M'kiwa) says:

      Don’t worry, there will be little FDI forthcoming, so you are safe! Safe in your poverty. Hahahaha.

  5. moyokumusha says:

    @ CD ??????

  6. Zimbali says:

    CD are you telling the intelligent readers of this website that there is no exploitation going on right now? I think you should go back to school and learn your algebra all over again!

  7. lloyd says:

    its time to take up arms and fight for our country , enough of this BS

  8. Small axe says:

    You will always get some silly person trying to make themselves sound clever. CD MUGABE HIM SELF WANTS FDI…LIKE YESTERDAY.

  9. just saying says:

    Anyone who has recently visited Zambia will witness the huge improvement in their economy which reaches to even the smaller towns which are becoming quite vibrant. This is only possible when you have investor friendly policies & there is the rule of law. We stand virtually no chance until there are fundamental changes throughout which the current government is incapable of making. When will this madness stop?

  10. munzwa says:

    Even if this Govt and Mugabe made the necessary overtures to attract FDI, would anyone really trust them??? I think not so live with what you voted for!!!! Sorry, I mean live with those who stole your vote…..

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