There is no doubt that 2011 will go down as a historic year in so far as President Robert Mugabe’s indigenisation and empowerment policy is concerned.
The indigenisation policy, spearheaded by indigenisation minister Saviour Kasukuwere, compels foreign companies operating in the country to transfer 51% of their equity into the hands of indigenous Zimbabweans.
According to the law, indigenous Zimbabweans are those who were previously disadvantaged before independence.
Critics — including members of the inclusive government, especially those drawn from Prime Minister Morgan Tsvangirai’s MDC — have labelled the policy a “political gimmick” meant to lure votes by Zanu PF ahead of the elections whose dates are yet to be announced.
Former ruling party Zanu PF has been accused of using the policy to gain electoral mileage ahead of possible elections next year or in 2013, while the MDC-T has argued that the policy scares away investors at a time when the country is showing signs of recovery following a decade of decline.
However, Zanu PF argues that the law is meant to address past colonial economic imbalances.
In his end-of-year address to Parliament, the Prime Minister said in 2011, Zimbabwe had attracted less foreign direct investment mainly as a result of the government’s indigenisation policy which was exacerbated by the political discord arising from the slow implementation of the power-sharing agreement.
“The indigenisation policy has largely been turned into political rhetoric which has intimidated investors as some political players sought to make cheap political gain out of this policy,” said Tsvangirai.
“We need a new thrust that creates jobs and protects investors while at the same time promoting investment and empowering the ordinary person.”
In April, the Chamber of Mines tried in vain to lobby for investment in social infrastructure such as roads, schools, dams and hospitals to count towards meeting the requirements of the 51% empowerment quota.
In the midst of confusion and discord within government as a result of the law, shadowy youth empowerment group Upfumi Kuvadiki — comprising of unemployed youths and opportunists — was “born”.
The group’s chairperson, who also doubles as spokesperson, Alson Darikayi, told NewsDay in September the indigenisation and empowerment law was an important policy instrument aimed at broadening the economic base and through this, at stimulating further economic growth and creating employment.
Darikayi argued there was no easy way to navigate this contentious issue without falling prey to the venomous outpourings and attacks from those across the political divide who may want to seek political relevance.
“Despite the controversy, indigenisation and economic empowerment remains an essential and vital tool for economic growth and development,” he said.
As the indigenisation drive reached fever-pitch, the government announced the “cancellation” of one of the country’s largest mining companies, Zimplats,’ licence for failing to comply with the rules and regulations.
Kasukuwere said: “We have in many instances tried to engage them in a win-win situation. As government, as the ministry, we have reached the end of the road. We have cancelled the operating licence for Zimplats.”
In response, Zimplats deputy chairman Muchadeyi Masunda this was not the time to play confrontational games, arguing Kasukuwere appeared to have “thrown his toys out of the cot”.
“We remain committed to sitting down not only with Kasukuwere, but Mines minister Obert Mpofu and other ministers interested. This is not the time to be using bully-boy tactics. We are in a hole as a country and Kasukuwere should stop behaving like a proverbial bull in a china shop,” Masunda charged.
“We should stop digging (in). We have never said we are anti-indigenisation and our track record speaks for itself. I don’t know whether he is grandstanding or not, but we don’t have any issues with government.”
Fifteen sectors, including banking and aviation, have been earmarked for indigenisation in line with efforts to spread economic benefits.
Kasukuwere has accused foreign banks, namely Barclays Bank and Standard Chartered PLC of playing truant.
Early this month, Kasukuwere told members athis party’s 12th Annual National People’s Conference in Bulawayo that a sector-specific strategy had been adopted to help fine-tune the empowerment drive and expand the beneficiation framework.
Other identified sectors include transport, energy, manufacturing, tourism, road transport, construction and engineering, trade, agri-finance, entertainment, education, sport, information communication technology and culture.
President Mugabe has since declared there was no going back on the indigenisation law increasingly viewed by critics as legislation that scares away investment with a bogeyman of uncertainty.