Indigenisation – the how and not the what by Vince Musewe

via Indigenisation – the how and not the what | The Zimbabwean by Vince Musewe 04.06.14

Most countries have some protection of their strategic economic assets or sectors; our problem is the how – not the what.

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: 10
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    I think that Zimbabwe is not in the position to dictate terms about investment as these investors can invest elsewhere. The terms and conditions have to better the terms and conditions of those that are to become our competitors. When the economy is up and running the Government of the day must be in a position to assist locals who have picked up skills to start their own enterprises. Of coarse those who have the means should be free to do joint ventures with external Investors without Government interference. There is nothing that will make any investor come to Zimbabwe when the Government wants to control their investment. This was foolish thinking by the Government in the first place. Of course there must protections for the locals i.e. no foreign workers to be employed where locals are available that are suited for the post. Compulsory training of locals in strategic positions. Also percentages of profits to be reinvested into the economy. Simple Economics is what Zimbabwe needs right now.

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    “We must pursue food security first. This requires that we utilize 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.” Vince come on man. You are not dumb. What difference will a title deed make in the current situation. The land grabbers and the Murimis have failed. You don’t use a title deed to plough. You don’t need it to plant. You certainly don’t need it for your crops to grow. You need expertise. Those that have lost their land had that. They were experts that’s why the grew crops and fed us even during the droughts.

    “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” Vince man what the hell are you talking about? These are people who make sure conditions to loot are in place. Then they loot. I cannot fathom why you would think that Zanu pf can ever have a solution.
    As I said you are not dumb. But then again I might be wrong.

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    Roving Ambassador 8 years ago

    My take is, all the resources in the ground that we cannot process our selves into primary goods, we must leave underground. That is until ourselves or our kids can manage to.

    Our bedrock for economic growth is farming and tourism. The farms must be given back to Zimbabweans who can farm and the deed holders must be compensated. We must realise the value in the land. The system must be bankable.
    The respect of property rights and individual must be upheld.
    Unfortunately all this is not in Zanu’s looting interest.
    ZANU must go.

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    John Thomas 8 years ago

    Vince you are a ZANU. Try as you might ZANU thinking is wrong. You cannot turn a pigs ear into a silk purse. Indigenisation is code language for racism. Deal with that.

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    Zimbabwe reporters seem to have short memories. To build an economy you need to encourage growth not popular rhetoric. Zanu PF Destroyed the bedrock of the economy, then went on a rampage to make the poor even worse off with the mass destruction of homes and incomes. That was the stick. Then came the carrot – indigenise and you all will be rich. Feed from what you did not create. It is all a pack of lies from a government that is so corrupt it laughs at the average citizen as it robs them blind. Worse the majority believe it in their desperation for free wealth to relive themselves of the quagmire Zanu has placed them in.

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    The bottom line is God will NOT bless Zimbabwe until we repent over this land issue and sort it out fairly. That ungodly land ‘reform’ has crippled this nation. It was violent, racist, illegal and covetous. It destroyed. Of course we needed agric reform but not in the ungodly way it was done. ZPf are reaping what they have sown along with the rest of us. Do any of us actually think that God (we call ourselves a Christian nation) will countenance what has and still is happening. And that we say because you are white/mdc etc etc you cannot farm. No repentance! No restoration. ZPF are going to be terribly judged unless they repent. Read Micah Chapter 2

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    If ZPF had one iota of common sense or goodness they would stop all land grabs now and go back to the drawing board with all stakeholders. Zambia is laughing all the way to the bank with Zimbabwe’s own dispossessed farmers.

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    Vince, vince……you cannot convince me that you are not benefitting frm indigenisation in some form or another as frm a Biblical perspective it is not right to steal and you claimed to have a Biblical outlook on life and that you believe in the Lord…? I can assure you that whether a person is black, white, pink, grey The Lord just does NOT CONDONE theft in any form disguised as any policy….look at all the beneficiaries of land reform and indigenisation only our “more equal” politically connected black brothers and sisters have benefitted…also by way of the constitution of this country any race or tribe born in Zimbabwe is indigenous….

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    Petal 8 years ago

    Find the loot

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    Petal 8 years ago

    Indgenisation here is being dictated by skin colour and tribe eveyone knows it does Vince think ordinary people are blind that they do not see what is happening Vince is lucky he has the right surname and what do these people do practice it in other peoples countries