Indigenisation saga rages on: Eric Bloch

via Indigenisation saga rages on – The Zimbabwe Independent June 6, 2014 by Eric Bloch

PUBLICLY, the first assertions that this country required to effect meaningful economic indigenisation were made in about 1958, when the liberally minded humanitarian Sir Garfield Todd and his political party, the United Rhodesia Front, urged that the laws barring the indigenous population from owning land except indirectly (via chiefs and tribunal councils) through designated “communal lands” be repealed.

Unfortunately this advice fell on resolutely deaf ears.

Although I was not a member of his or any other party, at one of his public meetings I supported the demand but emphasised that diverse policies and progress were required to enable capable members of the indigenous population to be active participants (not necessarily just employees) in all sectors of the economy. That too fell on deaf ears.

Some very limited consideration to these issues arose during the Unilateral Declaration of Independence (UDI) period, but yet again there was no meaningful progress on indigenisation. The first real movement in a partially positive direction was when post-Independence the Zanu PF government repealed the indigenously hostile Land Apportionment Act, and legislated that all rural lands were state property to be leased to farmers in general, but primarily to indigenous “new” farmers. However, the manner in which it was done was appallingly unjust, and with innumerable negative consequences.

In the first instance, government alleged that the white farmers being displaced had “stolen” the lands from the indigenous population, and therefore no compensation would be paid unless those farmers’ “original” homelands, for example the United Kingdom, paid such compensation.

This stance was in deliberate disregard for not only the fact that when the white farmers acquired the lands there was no one occupying it, and with equal disregard for the innumerable Certificates of No Interest which government had previously issued which enabled then white farmers to sell the lands to other whites.

The bottom line is government stole the land from the whites, albeit that the whites had shockingly and unjustly barred indigenous land ownership for many decades.

Moreover, government only issued offer letters to indigenous “new farmers”, but acceptance of those offers did not result in issuance of leases, which left the farmers with a great sense of insecurity, and rendered them devoid of collateral in order to secure essential funding.

At the same time, and for many years, government did not ensure the timeous availability of agricultural inputs, and also prescribed that crops produced in most instances had to be sold to specified state enterprises, usually at unrealistically low prices and delayed payment.

Consequently, agriculture production declined drastically and this seriously affected the economy. In addition, because of oppressive legislation and policies, about 1,5 million farm workers lost employment, rendering them devoid of income and condemning them to intense poverty.

Over the years government has recurrently assured 99-year leases will be forthcoming, and over the last eight months has stated that such leases will be formatted in such manner as to accord them collateral value, but that is yet to happen.

Government, when claiming to be doing anything progressive, can only work at three speeds: slow, very slow, and stop. In contrast, when it wishes to do something prejudicial, it usually also works at one of three speeds: too fast, much too fast, and catastrophically fast!

All of these circumstances have been major contributors to the tensions and hostile relationships among Zimbabwe and the international community, much to Zimbabwean prejudice.

The reduced goodwill caused by Zimbabwean actions and statements markedly reduced international aid, loans and other funding; diminished trade with resultant further negative economic consequences; discouraged greatly needed investment (potential investors fearing that their investments would be “stolen” in the same manner government “stole” the farms from the white farmers).

Then, in 2008, government rapidly proceeded with legislation for “indigenisation” of existing and future enterprises.

The legislation was targeted at intensified (even if indirect) governmental control or influence of almost all economic ventures, the vesting of part ownership in many of the targeted ventures by government through diverse funds and community trusts. This has been economically disastrous for over six years.

The legislation caused many non-resident investors to disinvest hurriedly, and is an enormous deterrent to investment in Zimbabwe. As a result, the economy has continuously struggled along, with much of the population suffering intense hardships, government being constantly bankrupt, and very little effective indigenisation being achieved.

Since the end of 2013 President Robert Mugabe, Minister of Finance Patrick Chinamasa, Senior Minister Simon Khaya Moyo, and others in high political authority have intimated that the policies and legislation would imminently be amended to be more effective, just, and conducive to investment, although until a week ago the Minister of Indigenisation, Francis Nhema, denied any knowledge thereof.

However this week various draft documents were considerably deliberated upon by much of the political hierarchy, and hence the hope that there will be remedies for the ills created by indigenisation (but with the current government that cannot be taken for granted).

The intended legislation will see some realistic modifications in respect of the commerce and industry, distributive services and allied economic sectors, which will motivate and facilitate new investment, provided that the legislation also contains provisions which then entrench investor security, and that such provisions are enforceable in law.

In contradistinction, the declared intents in respect of the economic exploitation of Zimbabwe’s natural resources are disastrous for investment.

To all intents government wishes to retain total ownership of those resources, with investors providing capital funding, requisite equipment, technological skills and inputs, and access to markets, in exchange for an alleged “profit-share”.

The reality is this cannot accord investors any real security, and only a greatly minimal return on investment.