via ZANU PF under pressure to deliver jobs as promised | SW Radio Africa by Tererai Karimakwenda November 25, 2013
The ultimatum given to foreign owned businesses by government last week is an attempt by ZANU PF to appear to be delivering on promises made during the election campaign earlier this year, an economist has said.
The ultimatum came from George Magosvongwe, the Permanent secretary for the empowerment ministry, who on Thursday told a Parliamentary committee that regulations which reserve specific sectors of the economy for black Zimbabweans would be enforced as of January 1, 2014.
According to the state run Herald newspaper, these “reserved sectors of the economy” include hairdressers, beauty salons, bakers, employment agencies, farmers, transport companies, estate agencies and retail and wholesale businesses. The Herald said those who fail to comply will be arrested.
Robert Mugabe also used empowerment as the key theme of his presidential campaign in the July 31st election.
Mostly Chinese and Nigerian businesses will be affected as shops mushroomed all over the country and provided cheap products and services. It is not clear how government plans to replace them with locals.
Economic analyst Professor Tony Hawkins told SW Radio Africa that ZANU PF is planning to enforce these laws now because they are under pressure to deliver on promises that they made ahead of the last election.
“The current government won the election in July on a manifesto that made a whole range of promises about indigenization of businesses and empowerment of people and so on. And now it is time to deliver and that is why now we are having this sort of initiative. So there is enormous pressure to deliver,” Hawkins said.
He explained that the ultimatum “is largely an attack on small businesses owned by minorities like Nigerian and Chinese people”, adding that there are quite a few of them running businesses in Zimbabwe.
“A lot of the businesses are very small and it would not be a question of a lot of resources needed. It would be possible I think to strong arm some of the banks into providing some resources,” Hawkins said.
He added: “The problem is the practical issue. Do you go and say you must close your business and someone else is going to come take it over tomorrow. I mean who is going to come? Who is going to be either trained or able or have the resources to do that?”
Chinese products in particular have made their mark on Zimbabwean culture, with locals referring to their cheap imports as Zhing-zhongs. But according to Hawkins, the Chinese government is more concerned with bigger business projects, and is not likely to change their policy towards Zimbabwe if a few nationals are affected by indigenization. He said the Chinese recently loaned $320 million to Zimbabwe to build a power plant.
George Magosvongwe, the Permanent secretary for empowerment, gave no details of government’s plan to the Parliamentary Portfolio Committee last week.
But his ultimatum came at a time when many companies are reportedly closing down. Many have lost their jobs and those still in employment are withdrawing their money from the banks, showing no confidence in the economy.