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Position on the indigenization regulations
Zimbabwe Congress of Trade Unions (ZCTU)
February 16, 2010

The Zimbabwe Congress of Trade Unions has been following closely developments in the country over the past weeks with particular concern over the Indigenization and Economic Empowerment Regulations. We believe this move that is coming under the guise of empowering 'indigenous people' has the potential to throw the country into anarchy just like the chaotic land reform programme did. It is ironic that these regulations that are anti-investment are taking centre stage when Zimbabwe is playing host to a tourism and investment indaba.

The ZCTU has noted the following with concern;

a. Insufficient stakeholder involvement and participation in crafting this policy. Hence this is just one of the top-down and populist policies being foisted on the economy by government. This has unfortunately been a hallmark of government policy formulation for a long time. Government does not seem to be learning from its past mistakes. Even within the inclusive government there is no accord and consensus on this regulation with the MDC T alleging that they were also not consulted and involved. This is a recipe for economic and political disaster.

b. The government does not have the money to buy the majority shareholding in the targeted businesses and there is a risk that this will result in another massive expropriation of businesses by ZANU PF linked gurus along the lines of the chaotic and negative-sum game of the land reform exercise.

c. The regulations will create disincentives for private sector and enterprise development and initiative as well as calculated risk taking. There will be no creation of new wealth since government will simply help itself to other people's sweat and efforts by expropriating existing businesses. The role of government should be to among others create an enabling environment that allows businesses to flourish and create more employment opportunities for the workers.

d. The regulations will discourage investment inflows into Zimbabwe. Already there is a lot of uncertainty concerning these regulations and this uncertainty raises the country risk premium of doing business in the country and thereby raising the cost of doing business in Zimbabwe.

e. The regulations show that the government is ignorant of its strategic role in economic development. No government the world over has successfully developed on the back of expropriating businesses.

Visit the ZCTU fact sheet

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