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politics of mining legislation in Zimbabwe's 2008 elections
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
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.
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
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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