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Indigenisation is here to stay - SAPES seminar with Minister Saviour Kasukuwere & CZI President Kumbirai Katsande
Amanda Atwood,
March 18, 2010

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As part of their ongoing policy dialogue series, SAPES Trust held a debate on indigenisation at their offices on Thursday 18 March 2010. Key presenters were Minister of Youth Development, Indigenisation and Empowerment, Saviour Kasukuwere (who put forward the recently gazetted indigenisation regulations), and Confederation of Zimbabwean Industries President Kumbirai Katsande. Below we share some of the issues these speakers addressed, and the concerns raised from the floor.

Minister Kasukuwere

The objectives of the Indigenisation Regulations were to create an enabling environment for previously disadvantaged Zimbabweans, fight poverty, encourage investment, economic empowerment, skills development and the creation of a national economy.

Government is interested in growing new businesses, as well as strengthening existing ones. Government does not have any hard positions per se, rather we are open to looking at incorporating different view points. But the indigenisation issue is firmly on the table - what is left is for the country to support it. Government is also looking at the Procurement Act, and how to make sure that it supports local procurement.

We have this law. It is trying to deal with the racist spirit that is in our businesses right now. We want to break the spirit that says I don't want to do business with Ibbo, I'd rather deal with Mike. I think once we exorcise ourselves of this spirit, we'll be able to move forward. This law would not have been necessary if everyone had been playing ball, and recognising the need to work for the good of our country. Listen

Yes, we took the land. The farmers are doing very well. But when you look at the behaviour of players in the agro-processing industry, there is concern. Some of these businesses, their attitude toward us as Zimbabweans - they are funding white ex-commercial farmers who must go and contract black farm owners on the land. Why can't you be decent enough to go and contract the farmer directly? The Chinese have come here. They have gone directly to the farmers, and have poured in huge amounts of money. This has helped the production of tobacco, for example. Not to say we prefer the Chinese, but it's about the attitudes which we display.

We have companies that have mined here in Zimbabwe for years, but they aren't investing anything. They are not declaring their profits. This is what informs us as government. We need economic justice and to safeguard the economic interests of this country.

These regulations come with a time frame - five years. There is no compulsion in these regulations. You just have to give us your plan. If you think you can't do it, say so. We'll have a look together. We are just trying to address the spirit: Are you prepared to work with Zimbabweans? We need to balance investments coming into our country as well as the aspirations of our people. Any government which thinks it can succeed by suppressing the desires of its people will never succeed. Listen

People have asked where we will get the money for the regulations. Assets are still very cheap in our economy today. You could easily take 50% of some of these companies. Are we saying that the economy has no money? We've given ourselves five years, in which we should be able to achieve the objectives we have set for ourselves. As the economy picks up, people will raise resources to buy shareholding. There is no free lunch. People will pay for shareholding. Listen

This is the time. We are currently under sanctions as a country, as a people. We have to find a way to survive on our own. One way to do this is to encourage your people to join business and start working hard. Let's be constructive. We are ready to talk. I am available. We are going to be buying businesses - this is no jambanja.

Kumbirai Katsande

Indigenisation and Economic Empowerment is here to stay. It has cross-party political support. When the dust has settled, we think it will be positive for the economy. It reflects the constructive potential and character of the Government of National Unity (GNU), and the spirit of compromise must become a part of how we as Zimbabweans resolve differences. We should not panic when we have differences, but we need to develop a manner of how to deal with differences as and when they arise. Listen

It is worrying sometimes because we still have a tendency of dealing with important issues from an entrenched or dogmatic perspective, which does not help us get the best solution for the country. We need more collaborative resolutions as opposed to antagonistic methods of trying to get answers.

On the question of timing, there have been two arguments - one that the economy is still too fragile to cope with seemingly investor hostile policies. The other is that the economy requires lots of recapitalisation, and that should be our focus. Since the indigenisation regulations were gazetted, the Zimbabwe Stock Exchange has lost 30-40%. On the other hand, there's been the argument that assets are very cheap right now, and we are giving away assets. But regarding timing, we believe that the regulations are there - we have to deal with them and move forward.

The 51% shareholder target has been discussed in the press as if it's a limit. But it is actually a target. The legislation is aspirational, not prescriptive - it does not say Shall. It says "will endeavour."

How do we define indigenisation, how is indigenous? We have some white colleagues who have indicated that they would have thought that any Zimbabewan born on or after April 18, 1980, and all those Zimbabweans who have renounced other citizenships and retained Zimbabwean citizenship should be considered indigenous. But as business, as a group, this is not a line of thought that we are pursuing. There is the possibility of individuals raising this in the Constitutional Court, and this is their right. Listen

Another idea would have been to look at how to indigenise an industry. So that when you take a helicopter view of the Zimbabwean economy, and Mrs Consumer, where she is spending her money, you ask where is 50, 60, 70% of her money going. If that money can be traced to indigenous businesses, or indigenous participation in the economy, then we think we have indigenised the economy. We think that is a useful way of looking at it, because we have said indigenisation must contribute to sustainable growth and development of the economy.

The Minister is under extreme pressure to change the regulations. The sense we get is that the regulations are going to be changed quite dramatically. This populism is there. But there is not one Zanu PF minister who has come out in support of these regulations, not even the vice presidents. I don't hear the war vets talking about indigenisation. This isn't an issue ordinary Zimbabweans are prioritising. So the Minister has been under a lot of pressure to say this is not helping the party whatsoever. And I am told that he has been told by very senior people that this is not the right thing to do, and that the timing is not right. So for him it's to say how to put something together that has some respectability. This is why we have always been excited about the unity government as business - for all of its weaknesses, what is the alternative. It gives us space for the private sector.

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