Reports by Indigenisation and Empowerment minister Saviour Kasukuwere at the weekend pointed to government plans to adopt a policy that will see Zimbabweans having 100% shareholding in mining firms in the country.
Whether that policy is good or not is something else, but our experience is that some of these policies are promoted by politicians with vested interests.
Kasukuwere said the new policy will ensure that local people get total ownership and control of their mineral resources. What he did not however explain is how the policy will be implemented.
The new policy to compel the mining sector to cede 100% to locals will definitely kill off the mining industry, just as the Land Act killed off agriculture.
Kasukuwere must avoid burying his head in the sand because the reason the indigenisation programme in Zimbabwe is turning out to be problematic is that ordinary people do not have the funds to buy the reserved shares.
And what that actually means is that foreign companies cannot come to Zimbabwe and do the exploration because it’s an area that is reserved for Zimbabweans. In that vein, politicians must not forget that in most cases, the capital, equipment and expertise that the country would require would normally come from foreign firms.
Ironically, Zimbabwe is one country whose mineral resources are largely untapped. That is partly because of flip-flop policies that scare away investors. If the resources cannot be quantified how do Zimbabweans expect to benefit from the so-called abundant mineral resources, which they cannot compute?
A good example is politicians’ claim that Zimbabwe holds billions worth of diamonds at Chiadzwa. But mineral resources are always finite. Hence Zimbabwe must compute all it holds so that we can plan our future. The country must always sell enough diamonds they need to boost the economy for the year as opposed to blind mining to line politicians’ pockets. Government needs to know how much resources the country holds so as to plan for the future. Given this scenario Kasukuwere’s policy is frightening as this could collapse the economy once again. While Kasukuwere is pushing for new legislation, National Indigenisation and Economic Empowerment Board chairperson David Chapfika has given foreign-owned banks until the end of this month to comply with the indigenisation programme.
Both Kasukuwere and Chapfika have been associated with financial institutions that have collapsed over the years. One wonders whether any of their targeted banks will survive another day once they are indigenised. It is clear that Chapfika and Kasukuwere are spoiling for a fight with Finance minister Tendai Biti and Reserve Bank Governor Gideon Gono over the foreign banks issue.
Chapfika warned that any attempts to resist the programme would be futile. It is not right for politicians to want to destabilise the financial sector by pursuing short-term gratification which can only lead Zimbabwe to unintended consequences.
No one is against indigenisation but there must be order in the financial services sector and in the mining sector. Firms must be allowed to create more jobs which can only be achieved through investment and effective management. The current partisan manoeuvring is leading us to disaster.