Reserve Bank of Zimbabwe governor Gideon Gono says the ongoing indigenisation and economic empowerment drive should empower locals in a manner that preserves and grows the stock of already existing wealth, while at the same time increasing their participation in the various economic sectors.
In his supplement to the July 2011 monetary policy statement on Friday, Gono said the central bank remained opposed to any attempt to hide behind the indigenisation law or any law for that matter, in order to commit or justify acts of economic banditry, expropriation and or unfair practices.
He said he was against any actions that suggested that as a country “we are not a law-abiding citizenry”.
Gono noted that any attempts to parcel out pieces of the economic cake and opportunities created by the legislation to a few connected cliques of people whilst the majority of intended beneficiaries remained with nothing, as happened in the past with respect to other government empowerment schemes, was unacceptable.
“This law must not be used to multiply pockets of inefficiency, in as far as utilisation of national resources and opportunities of the country are concerned,” said Gono.
He said those that benefited from the land reform programme, but were not utilising the farms and should not be allowed to go and multiply that failure into other sectors such as mining, manufacturing and many others.
“There ought to be a deliberate bias towards or in favour of those who have not benefited from other government programmes before, so that a broad-based empowerment model can be achieved.
“It would be wrong to continue to concentrate new and scarce resources and opportunities on a few individuals, some of whom are even struggling to utilise what they already have to the economy’s advantage.”
The central bank governor said the economy was littered with cases of productive farms lying idle, farms which have been turned into grasslands instead of “maizelands” yet land should be used to advance the country’s economic fortunes.
He said it was time the government took a tough stance against economic non-performers and the indigenisation law provided a great opportunity to screen out opportunists and those without a track record of producing for the country.
Gono urged the nation to embrace the ideology of hard work, productivity, law-abiding citizenry, fairness, accountability and transparency.
“The implementation of the economic empowerment strategy should be done in a manner that immediately reduces poverty for the majority of the people, and enhance societal welfare,” said Gono.
“The programme should ensure the equitable redistribution of wealth across broad spectrum of societal groups notably, women, youth, chiefs, and physically handicapped. Whatever indigenisation and empowerment model we adopt must fulfil certain aspirations of the population, hence the need for it to be broad-based, touching the grassroots people, the youth, women, elderly and vulnerable, including special need groups such as the disabled, chiefs, headmen down to the village heads and communities in between.”
He said given that only a few could benefit from the equity-ownership model being pushed under the indigenisation programme, the central bank said it was advocating for a supply and distribution indigenisation and empowerment model, which is premised on the participation of a broad spectrum of the population, through the supply and distribution chain of the whole country’s economic cake, as opposed to primarily focusing on equity holdings.
Gono said under this framework, the government could ensure that indigenous people supply inputs and services into the country’s production processes adding that the strategy effectively empowers indigenous people to control downstream industries through supplying raw materials, services and other inputs.
“The model also envisages a gradual approach to attainment of the company ownership thresholds by indigenous Zimbabweans, in a manner that ensures sustainable empowerment, inflows of much-needed foreign capital and minimal disruption to economic activity,” said Gono.
“Under the empowerment-led indigenisation initiatives, companies will thus be required to source a specified proportion of their inputs, raw materials and spares from indigenous entities.”
He said empowerment of indigenous people should improve their basic welfare and reduce poverty in line with the internationally recognized millennium development goals.
“This can only be achieved by ensuring that they take an active part in the supply of goods and services to government departments, public enterprises, local authorities and private entities,” he said.
A cautious approach is, however, required in sensitive sectors such as the banking sector, where confidence should be retained at all cost.”