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Community share ownership:Who is benefiting?


WITH statistics showing that more than a million children in Zimbabwe are failing to go to school due to lack of funds, questions have been asked on whether the country is suffering from a resource curse.


Notwithstanding high literacy levels — one of the highest on the continent — the country has for years been struggling to provide decent education for many innocent lives.

So desperate is the situation that the debt-ridden government now looks up to development partners and non-governmental organisations to finance key social programmes in a country with the second largest known platinum reserves in the world.

When the government launched the first community share ownership scheme under the economic empowerment policy, many would have thought this would provide reprieve for those living in abject poverty.

Platinum giant Zimplats, a unit of South Africa-based Impala Platinum, set the tone for many foreign-owned mining companies when it surrendered a 10% stake to the Ngezi community last year.

In compliance with the indigenisation and empowerment law compelling foreign-owned mining companies operating in Zimbabwe to dispose 51% stake to locals, at least 10% of this equity is spared for the local community in which the firm operates.

The logic was simple: Equitable distribution of wealth.

Experts, however, contend that spilloff benefits of the country’s share ownership schemes can only be felt in the long term. With watershed elections expected next year, critics contend that the indigenisation policy could be Zanu PF’s trump card and may benefit party loyalists.

The level of polarity on the political scene has cast doubt on whether the policy would achieve its desired goals.

Economist Erich Bloch has been quoted saying the schemes may create negative ripples in a country desperately in need of foreign direct investment, which currently accounts for 3% of gross domestic product. At peak production,  foreign  direct investment accounted for 25% of the economy.

“We have lost the potential to attract investment. The indigenisation policy is ill-advised and damages the economy,” he said.

“Which investor would want to invest where half of his investment will be taken and wouldn’t have a say in the running of their businesses?”

Clearly concerned by investor fears, the Youth, Indigenisation and Economic Empowerment ministry this week said it had engaged a team of academics and interested groups to craft a broad-based empowerment policy.

Academic Jesimen Chipika yesterday told delegates attending a two-day empowerment workshop which ends today that the first draft of the Zimbabwe Broad-Based Economic Empowerment programme had been completed.

The 30-year policy is expected to be launched next year.

She said the team had carried out a survey which showed that many Zimbabweans were against the redistribution of wealth to elite blacks.

“It emphasises a comprehensive restructuring of institutions and society to effectively alter power relations in the economic sphere,” Chipika said.

“So it has to be much deeper, more comprehensive. Many more strategies must come on board.

“Economic empowerment and indigenisation is not a short-term thing.

“It’s a process. It’s not an event. So it’s not something we can do today and say it’s complete.

“That’s why we have to be ready to stay with it for the next three decades.”

She added that the success of the policy was anchored on macroeconomic and political stability growing the economy and investment infrastructure.

Report by Obey Manayiti Business Reporter

VILLAGERS in Marange area have professed ignorance over the recently launched Zimunya-Marange Community Share Ownership Trust. The local version of the trust was launched by President Robert Mugabe in January as part of the indigenisation programme to empower the local community.

The event saw Mugabe pledging $1,5 million towards the opening of a bank account for the trust.

Diamond mining companies in Chiadzwa contributed $10 million each towards the trust.

In addition, the Marange people were given mining rights that would enable them to venture into the diamond business. Speakers at the event spoke highly of how the Marange people were going to benefit from this initiative.

However, a snap survey carried out by NewsDay in Marange area recently showed that various sections of the community did not fully understand the intended purpose or operations of the multi-million dollar trust.

People said they were not aware of how the trust would be operated and managed.

To show their displeasure at the trust, on September 20 villagers staged protests in Marange demanding to know why they were not being consulted on affairs of the trust.

Chiadzwa Community Development Trust (CCDT) vice-chairperson Malvern Mudiwa said he did not foresee any meaningful development being spearheaded by the trust.

“I don’t foresee any meaningful development coming from this trust,” he said.

“At the launch, only people aligned to Zanu PF were invited and they didn’t have the courtesy to invite us as CCDT, yet that trust is our brainchild.

“If it was genuine, then why is it operating under this cloud of secrecy?

“In all developmental issues, people should be consulted on how best they can be helped.

“We don’t know how much has been deposited in the trust so far and who the signatories for that money are.

“That on its own shows that there is no transparency in this trust.” Ward 28 councillor Moses Zvinoira of Madondo village said there should be transparency in the way the trust is managed.

“This whole thing could just be a political strategy of campaigning by Zanu PF,” he said.

“There are a lot of unexplained issues in that trust. Since its launch, not even a single meeting was called to discuss the way forward.

“Almost three quarters of boreholes in my area are down and we are struggling to raise funds to rehabilitate them.

“A lot of things need attention. Only if we knew the people to approach concerning the trust, probably we could have accessed funds to develop our community.”

Ward 24 councillor from Chigwiza village said as the councillor for the area — which is close to the diamond field — he expected to be consulted on how the money was spent. MP for the area, Shuah Mudiwa, said he was worried about the composition of the trust and questioned the status of relocated people. He said the inclusion of Zimunya area was problematic and if the trust was sincere on empowering the affected community, then areas such as Chimanimani and Buhera should have been included because of their proximity to the diamond fields.

Acting Mutare district administrator Cosmas Sigauke said he was not qualified to comment on issues raised by villagers although he sits on the trust’s board.

Chief Marange, who also sits in the board, confirmed that the trust’s coffers were dry.

“The money has not yet been deposited in our bank account,” he said.

“We cannot even access the money pledged to us during the launch.

“We cannot make a follow-up because we don’t have the right to approach individual companies.”

He said as a traditional leader, he could not challenge the inclusion of Zimunya on the trust and they had to work with the structures set up by the government.

Gwatiringa speaks on trusts

By Our Business Reporter

NATIONAL Indigenisation Economic Empowerment Board (NIEEB) chief executive officer Wilson Gwatiringa says the structure of community share ownership trusts makes it difficult for individuals to abuse funds.

He said NIEEB was happy with the work that community ownership trusts that had received funds were doing.

“We are happy with the delivery of trusts,” Gwatiringa said.

“The objective is to give benefit to the man on the ground where mining is taking place,” he said.

He said the community share ownership trust in Shurugwi had used part of the funds to reconstruct a dam, construct a mortuary and a maternity waiting ward.

He said the trusts were set up to have checks and balances meant to curb abuse of funds.

The trusts, according to Gwatiringa, were composed of a chief executive officer of the rural district council, a district administrator, a lawyer, an accountant, special interest groups and a company representative from mining entity. “The trusts are audited by external auditors. We do not expect things to go unchecked.

“The chairmanship rotates on a yearly basis.” Asked about allegations that some of the funds placed in the community trusts where being invested on the Zimbabwe Stock Exchange rather than carrying out community projects, Gwatiringa said: “I am not aware of that, but I doubt that such a thing could happen.”

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