The Australian ambassador to Zimbabwe, Matthew Neuhaus, is concerned with the way in which Zimbabwe has decided to implement its indigenisation policy.
Contributing to a discussion on mining in Zimbabwe held last week at Sapes Trust, the diplomat said the style of indigenisation the country has settled for was an “old fashioned nationalistic approach”.
The ambassador was responding to a presentation on mining, mainly by foreign-owned countries in Zimbabwe, made by Deputy Prime Minister (DPM) Arthur Mutambara.
On Thursday, the government announced it was taking over all foreign mining firms that had not complied with the indigenisation law compelling them to dispose 51% shareholding to locals.
Ambassador Neuhaus said in Australia, most mines were now owned by the Chinese, but the government has crafted policies to ensure they still derive gain from the mining sector.
“Most mines in Australia are now probably owned by the Chinese but Australia, at the end of the day, still owns the land of the country,” he said.
Australia, which is China’s biggest overseas supplier of iron ore, is guaranteed a steady stream of royalties and taxes while the projects generate thousands of Australian jobs.
Speaking at the same occasion, international trade lawyer and award-winning writer, Dr Petina Gappah, concurred with the diplomat.
She said the issue of royalties from mining companies should be revisited as an option.
“Why not restructure the issue of royalties? This (indigenisation) should not be about ownership for government that has no experience in entrepreneurship,” she said.
She said unless the government won the trust of all stakeholders and crafted a sound policy framework, there were going to be challenges with indigenisation.
“Trust is at the heart of indigenisation. We don’t trust government and this is what you should address,” she said, adding that unless such fundamental problems are addressed, challenges facing the country like corruption and a poor work ethic, would remain entrenched.
DPM Mutambara conceded that they were “guilty as charged” and revisiting the policy was necessary.
“I know ownership isn’t everything. We are guilty as charged. We must address these fundamental problems for our brand to be credible,” he said.