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The politics of mining legislation in Zimbabwe's 2008 elections
Rejoice Ngwenya
December 13, 2007

In a book called 'Inside our Mining World - the untold story of children and women in Zimbabwe's mining communities', the African Community Publishing Development Trust, a Zimbabwean non governmental organisation refers to Henrick Ellert who proves that the Portuguese traded with the Changamire dynasty in gold as early as the 15th Century. Even then there were mining disputes, some resulting in fatal skirmishes, and so it comes as no surprise when president Robert Mugabe's most recent Mines and Minerals Amendment Bill, 2007, a poor impersonation of the more progressive Mines and Minerals Act [Chapter 21:05], meddles with property rights in the quest to save ZANUpf's waning political dynasty.

If one of the objectives of this law is "to make provision for the indigenisation and localisation of the mining industry", it comes as a big surprise to political neutrals who have a right to rationalise that the 'age old' Small Scale Mines Association of Zimbabwe have always had the proper legal instruments to push for mine indigenisation. But just like the land reform of 2000, this new Bill is caught up and entangled in a typhoon of political patronage and vote buying. My humble submission is that the controversy around the politicisation of the government's 'indigenisation' of mining will, if passed into substantive law, have far reaching implications beyond the violation of property rights and dissuading foreign direct investment. The frenzy around gold panning in Kwekwe and the maniac diamond rush in Mutare are an environmental disaster anointed by ZANUpf party moguls who apart from enriching themselves appease party faithfuls in the hope of safeguarding a fading political fortune. Therefore even if the mines Minister, Amos Midzi, does not believe in the virtues of the Mines and Minerals Amendment Bill, he can only submit himself to the cruel forces of political demons.

Zimbabwe's mines sector has legendary value addition to the socio-economic fabric of the country. Apart from being in the top three of contributors to foreign currency earnings, mines have long been part of our country's once sophisticated social, health, education and human resource big picture. Mining companies were responsible for churning out top athletes and football teams. Yet ironically, the ZANUpf dominated government has already presided over the collapse of several mines including Alaska and Mangura. Political interference and cronyism is about to seal the fate of Hwange, one of the best-known coal suppliers in Southern Africa. World-class education, health and housing facilities may dissipate in the process, while whole communities will be reduced to destitution. Mines have a finite life, but inept planning and political naivety means that there is no back-up system to absorb mining communities and related infrastructure into national development framework. Long after copper prices collapsed, Mangura could have been a centre of commerce and industry, but misplaced priorities and short sighted public planning has been the hallmark of governance in Zimbabwe in the past 27 years. Now, the Mines and Minerals Amendment Bill, if passed into law, is about to nail Zimbabwe's mining future to the cross of investment oblivion, never mind a huge dent in the country's already fragile gross domestic product.

So what is it about this legislation that we market economists find diabolical and abhorrent? One of the most fundamental rules of good governance is that legislation, policies and regulations must have what one can term a 'positive impact assessment rating' before they are force-fed on citizens. The 2000 land reform laws left an entire country on the brink of food security disaster, thousands of a once thriving white citizenry destitute, vast tracts of land barren and fertile land decoupled from a high yielding property market. Innocent citizens were murdered, court decisions ignored with impunity and the very fundamental truths of human liberty violated. Now, according to Section 411 of the mines Bill, apart from 'a 25% non-contributory interest', a mine will be required 'to make available 51% of its shares available for acquisition by the State or indigenous Zimbabweans'. Of greater interest is " "indigenous Zimbabwean" means any person who, before the 18th April, 1980, was disadvantaged by unfair discrimination on the grounds of his or her race, and any descendant of such person, and includes any company, association, syndicate or partnership of which indigenous Zimbabweans form the majority of the members or hold the controlling interest."

My argument is not about the credibility of us black Zimbabweans 'owning' anything, but that the government is not the right institution to 'legislate' ownership, rather, they should create an environment where the market allows for free exchange and transfer of property. There is documentary evidence to prove that so far, the main beneficiaries of so-called 'black indigenisation' are influential individuals at the epicentre of the ruling party ZANUpf. Indigenisation smacks of double standards. Telecoms mogul Strive Masiyiwa had to go to Supreme Court to break post and telecommunications monopoly. Broadcaster James Makamba and mining maverick Mutumwa Mawere were exiled for proving that alternative political opinion on independent television is not as poisonous as ZANUpf makes us believe. So indigenisation, especially as prescribed by ZANUpf, becomes not just a monumental farce but also an object of political patronage!

In any case why does our government have a habit of wanting to get things for free, ostensibly on our behalf? Who will determine which 'indigenous' person gets what percentage of which mine? What is it that we can learn from the South African Black Economic Empowerment experience? There is overwhelming evidence that expropriation and nationalisation cause a negative flow of investment energy in economies. Tanzania was a case in point. I can also recall scores of national assets that the government of Zimbabwe currently owns, yet have nothing to show for it. One of them is Zimbabwe Steel Company [ZISCO] whose huge subsidies are draining the fiscus. Zimbabwe Broadcasting Holdings [ZBH], the State-owned but ZANUpf controlled company that attracts very little or no advertising and passes as the worst entertainer in the region. The National Railways of Zimbabwe [NRZ] is so mismanaged that it is failing to deliver coal to tobacco farmers and electrical power stations. So one can conclude, within a reasonable degree of accuracy, that the ruling party, having learnt that a land reform program that is motivated by greed and political patronage is only good for one thing - winning elections - will go ahead and bulldoze the mining Bill, with one eye closed to long-term viability and another wide open to 2008 electioneering.

* Rejoice Ngwenya is a liberal free market campaigner who coordinates policy think tanking in Harare, Zimbabwe.

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