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NewsDay

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Indigenisation versus Juice:Which is the way forward?

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GROWING the economy or localising a stagnating one has become the talking point for Zimbabwe’s political parties as the country moves closer towards watershed elections.

GROWING the economy or localising a stagnating one has become the talking point for Zimbabwe’s political parties as the country moves closer towards watershed elections, which are expected to mark an end to the inclusive government formed in 2009.

Report by Bernard Mpofu

As electioneering intensifies with each day, the country’s two main political parties are dangling bread and butter issues in the coming polls.

Job creation and a bright future has become the only rallying point for many Zimbabweans who have endured nearly a decade-long economic meltdown that ended in 2009 after the introduction of multiple currencies and the formation of the coalition administration.

With many companies folding each day leaving scores on the streets, many urbanites now look up to the government to bring food on the table.

The bulk of Zimbabweans living in rural areas, who eke out a living through subsistence means, are currently struggling to find markets for their agro products as cheap products mainly from South Africa flood the market.

With the post inclusive government euphoria coming to an end and political slogans now becoming the order of the day, the looming polls have but created an aura of uncertainty for both individuals and corporates.

In the meantime, timid capital continues to wait and see, or at least search for another recipient country as political bickering continues.

Zanu PF, the dominant party in the coalition this week holds an annual conference which is expected to set the tone for the plebiscite.

Redistribution of wealth has become the election trump card for the party.

The 13th Zanu PF National People’s Conference officially opens in Gweru tomorrow under the theme “Indigenise, Empower, Develop and Create Employment”.

So enticing may be the empowerment programme in many economies but many local observers, criticise the policy for scaring foreign investors.

Clearly opposed to the current empowerment drive, the Prime Minister Morgan Tsvangirai-led MDC party last week launched an election manifesto dubbed Jobs, Upliftment, Investment Capital and the Environment (Juice), which is anchored on increased foreign direct investment (FDI) inflows.

Critics have, however, already trashed the blueprint for relegating locals to economic bystanders as activity of multinational companies intensifies.

Official figures show that FDI inflows, which at peak averaged 25% of the gross domestic product (GDP) have plunged to 3% following the enactment of the empowerment law in 2008.

Treasury estimates that Zimbabwe requires a $4 billion stimulus package to grow the economy which slowed down this year.

Justice minister Patrick Chinamasa recently told delegates attending the inaugural empowerment conference in Harare that it was wrong to blame the empowerment policy for the low investment inflows.

“Investors are willing to go in any environment at any terms provided the environment offers an opportunity to make a profit and grow their money,” Chinamasa said.

“Investors have been known to go in environments that enforce 100% local ownership.”

“By and large, indigenisation policies have not stopped FDI inflows.”

MDC-T, which strongly criticises the empowerment programme as an attempt to hoodwink the electorate ahead of the looming polls, has warned that the policy could have a domino effect on the economy.

“In order to do this, we need to build a sustainable economic framework that grows the economy.The MDC believes that in order to spur sustainable economic growth, it is imperative to grow the national cake,” said Tsvangirai in his preamble of the new manifesto.

“Concentrating on sharing the existing small and diminishing cake is a recipe for disaster.The current version of indigenisation is tantamount to nationalisation and expropriation and it is clearly a political gimmick by Zanu PF.”

“The MDC’s jobs plan entitled Jobs, Upliftment Investment Capital and the Environment is a comprehensive plan for the generation of decent jobs that will not only end poverty but also empower citizens.”

Its election time again!

THE Zimbabwe Broad-Based Economic Empowerment Plan (ZBBEEP) THE Indigenisation ministry led by Saviour Kasukuwere is in the process of fine-turning its economic and empowerment plan whose objective is to force foreign-owned companies to cede 51% to locals.

The main goal of the Zimbabwe Broad-Based Economic and Empowerment Plan (ZBBEEP) is to accelerate over a 30-year period (2013-2042) the inclusive and broad-based economic empowerment of previously disadvantaged Zimbabweans in general and women, youths, the rural population and those living with disability, in particular, while ensuring shared benefits with vulnerable groups such as the elderly, the chronically ill who are not productive, and orphans and vulnerable children (OVC), among others, as a prerequisite for sustained economic growth and human development.

This is expected to transform the economy from primary commodity production by 2017, to value addition by 2018 to 2027 and to innovation/knowledge-based economy by 2042.

The ZBBEEP adopts the position that “economic empowerment as a conceptual framework incorporates the aspirations of indigenisation”.

The plan in the short-term, 2013-2017 seeks to: Halve total consumption poverty from 80% in 2013 to 40% in 2017, paying special attention to previously disadvantaged Zimbabweans (PDZs) in general and women, youth, rural populations and vulnerable groups the elderly, OVC, non-productive chronically ill persons in particular.

This will be achieved through inclusive, broad-based economic empowerment and expansion in all sectors.

To ensure broad-based new wealth creation by increasing the number of formal businesses in all sectors from around 10 000 in 2013 to 30 000 by 2017.

The majority of these formal enterprises will be small and medium enterprises (SMEs), owned by PDZs, including women, youth, rural populations and people living with disability, to ensure inclusive and dynamic economic growth and development with the private sector as the engine of growth.

To increase domestic investment from $7 million in 2013 to $1,5 billion by 2017.

To increase FDI levels from around $105 million in 2013 to at least $600 million by 2017 to support mainly the recovery of key economic enabler sectors such as energy, water, transport and ICTs as well as identified key export sectors.

To ensure the equitable distribution of productive and wealth creation assets throughout the economy, particularly to PDZs, including women, youth, rural populations and people living with disabilities.

In addition, the utilisation of commercial agricultural land will be increased from 40% in 2013 to 60% by 2017 thereby guaranteeing national food security.

Formal Small-Scale Mines (SSMs) will be increased from 25 000 in 2013 to 40 000 by 2017 and their productivity and consolidation into medium to large mining companies, will be intensified thereafter.

To ensure a conducive environment for broad-based wealth and massive employment creation in the short term, through changing the conditions that created exclusion of the majority PDZs in general and women, youth, rural populations and people living with disability, and creating conditions that facilitate their inclusiveness in the mainstream economy.