Indigenisation – the how and not the what

via Indigenisation – the how and not the what | The Zimbabwean. 08 June 2014

I am happy to see the dialogue about indigenisation is beginning to take a new direction and I suspect it has dawned on Zanu (PF) that, although it was a powerful message during elections, the economic realities require a different strategy. That has always been the case with politicians. Election campaigns are not necessarily based on what will happen once they are in power. Slogans are mere tools, a means to political power – and that’s where they stop.

It was Winston Churchill who said that criticism may not be agreeable, but it is necessary. It fulfils the same function as pain in the human body. It calls attention to an unhealthy state of things.

In that vein, we must continue to look critically at what the government says and does because ultimately, if our country is to develop and live up to its full potential, it can only do so based on taking into consideration our collective views – not only those of politicians.

There have been calls to completely repeal the indigenisation laws. I do not agree with that view. Most countries have some protection of their strategic assets or economic sectors. Our problem is the how – not the what.

In my opinion, it is the responsibility of any government to promote equitable economic growth and opportunity. It is also their responsibility to ensure that the country benefits most from its natural assets. This can be achieved in many ways that do not stifle foreign investment.

As I have said before, indigenisation can be an important tool to facilitate equitable economic opportunity and growth so that we can avoid skewed income distribution and the existence of a first economy where economic power is concentrated, and a second economy characterised by poverty. But it is not the only tool. This means we need a cocktail of complementary economic tools and policies that ensure that our country develops to the benefit of all our people.

Given the high employment and low investment levels prevailing now, our priority must surely be to increase investment, localise production of what we consume, add value to primary products, increase tax revenues, rehabilitate our infrastructure and generate employment. Local ownership can only be pursued where this does not contradict our economic imperatives.

We have to sacrifice something in order to kick start our economic revival. That sacrifice requires us to be pragmatic about localisation of ownership – especially where most people can hardly afford to pay fair value.

This is now beginning to happen in the financial services sector, where we have seen several indigenous banks selling majority equity stakes to foreigners. The thinking behind this is that it is more beneficial to the economy as a whole to be liquid, than to insist that a few of us own majority equity stakes in non-viable institutions.

We must extend this same thinking to agriculture. There is just too much emotional baggage and vested interests about land and I am anxiously waiting to see some sense prevail there. We must pursue food security first. This requires that we utilise all our human and natural assets. From there, we must give title to all land owners, but only after removing the conflict around certain properties.

The “new” indigenisation model being touted by Jonathan Moyo still leaves too much room for manoeuvre and corruption. My basic questions are: who determines the appropriate return on investment? Who determines the ceiling of operating costs and for how long? Who makes the major management decisions?

I still need to examine this “new” model. From the outset, it appears we have a case of government coming up with another “solution” without anticipating the unintended consequences. A government must never be allowed to prescribe investment returns or operating costs. This goes against the whole idea of free enterprise and investment practice.

Conflicting vested economic interests of ministers and other government officials – and the public sector in general – will continue to lead to inconsistent and opaque policies and encourage corruption.

Our government interferes too much in business and the economy and it has become a spoil sport as opposed to being a facilitator.

In the Zimbabwe we want to create, you are either in government or in business. We cannot have civil servants masquerading or moonlighting as businessmen while claiming to represent the interest of the people.

The struggle continues! – Vince Musewe is an economist and author based in Harare. You may contact him on vtmusewe@gmail.com

 

COMMENTS

WORDPRESS: 8
  • comment-avatar

    Did not see the How and I do not believe anyone knows the What.???

  • comment-avatar
    Petal 8 years ago

    feel it is a non starter if Francis Nhema is saying it is not for the Public Domain

  • comment-avatar
    Petal 8 years ago

    They still seem to want it veiled in a shroud of secrecy because of the grabbing going on by the likes of Themba Mliswa who it seems will never be prosecuted under the buffoon government – there could be others too that are doing it like him

  • comment-avatar
    John Thomas 8 years ago

    In Zimbabwe indigenisation equals racism. We have a racist government with racist policies. No amount of verbal deodorant will fix this. This is another article confirming Musewe as a ZANU apologist.

  • comment-avatar
    The Mind Boggles 8 years ago

    Vince it doesn’t matter how you dress it up it’s a racist policy. If a black Zimbabwean becomes British through naturalization or by birth they are entitled to own land, a business or even a mine in that country. White Zimbo’s some who are 3rd or 4th generation are allowed diddly squat??? Come on please don’t try to describe skewered unacceptable policies as anything else. Or how about a swop all black businesses in the UK given to white Zimbo’s and you can have 100% of ALL business in ZIM

  • comment-avatar
    munzwa 8 years ago

    @ the mind boggles, well said, lets determine the who is indigenous? read previous article about the Gwanda Mayor…laws without clarity are open for corrupt and manipulative practices which is the zanu strategy…

  • comment-avatar
    Bloody agent 8 years ago

    The commercial farmers need to be compensated before any investment is encouraged.

  • comment-avatar

    The how always affects the what. Remember, what we have in Zimbabwe, “indeginisation”, is a quickly conjured up political tool by ZANU PF necessitated by its incompetence to run a modern economy and nothing in the world is going to make them competent enough to run a modern economy. You can give them an ideal or prototype of the “how” but the baggage that comes with ZANU PF can never interest real investors to invest in Zimbabwe. The kind of investors who will continue to invest as long as ZANU PF is in power are the fly by night Chinese investors or leeches who will continue to suck the economic marrow to non performance. There, may be some real and serious investors here and there who may deep their toes to test the waters, but that will not resuscitate a dying economy. The word indeginisation itself in Zimbabwean parlance has been dragged through a lot of mud by ZANU PF to retain its real and original meaning. If we are to move in a positive direction we can borrow what little plus there is in the indeginisation laws and implement real policies that will jumpstart our economy, but for Pete’s sake stop calling it indeginisation because it has a chilling effect. It reminds investors, who are majority white, of the racist policies and practices and avalanche of corruption that the current indeginisation program engendered. We the indigenous people must also be keen enough to learn how modern economies are run, not be simply envious- I-can-grab-what-I-want-because-I am-a black Zimbabwean-attitude.Many white and of course non ZANU PF Zimbabweans worked very hard and build their business empires. They just didn’t grab and destroy. They started from scratch, but thanks to the current indeginisation policies they lost everything. So the how in this political climate will not help anyone, even ZANU PF.