Dont grab, create new firms, Zhuwao told

via Dont grab, create new firms, Zhuwao told – NewZimbabwe 24/01/2016

UNIVERSITY of Zimbabwe Economics Department Chairperson Dr Pheneas Kadenge says government should encourage the creation of new indigenous enterprises instead of targeting existing foreign and white owned businesses, warning that the latter would have disastrous outcomes.

“The indigenisation of enterprises does not necessarily lead to economic expansion; what is required for that to happen is economic empowerment itself,” Kadenge told a business meeting which was graced by Indigenisation minister Patrick Zhuwao in Harare last week.

He added: “And really the point here is that there is need for strong support for the establishment of new indigenous enterprises, why don’t we encourage the establishment of new indigenous enterprises rather than taking over existing ones.”

Kadenge warned that continued seizure of foreign-owned companies without economically empowering the grabbers was a recipe for disaster.

“You can have economic indigenisation without economic empowerment like what is happening in the case of farms; there is just a change in the ownership but the persons on the land cannot produce because they are not economically empowered,” said Kadenge after he had warned the meeting that “I am going to tell the truth”.

Zhuwao, however, insisted that government was not going to re-open debate on indigenisation.

“The position from a policy point of view is extremely clear, ( Totongo gara nayo yatofanana nechirwere kana watoenda kuNew Start centre waongororwa ropa wangoziva kuti ndozviripo wotopinda pachirongwa) It is like HIV after you have tested positive; you have no option but to start taking Anti-Retroviral drugs,” said Zhuwao.

“No matter how much you may want to turn around and say to political powers listen can we re-look at this, the political powers have been given a particular mandate. So, it will be a waste of time to talk about renegotiating the policy that is a reality; that we need to live with.”

The indigenisation laws which dictate that foreigners get minority share-holding in business ventures with locals have divided the President Mugabe administration with conflicting statements coming from cabinet ministers.

Many observers blame the law for the reduced investment zeal from would be investors who fear losing their firms if they start their businesses without government clarity on the measures.

Last week, Australia said its nationals were seating on the fence with their “long” term investment plans waiting for government to clarify the black empowerment laws.