Sunday, January 05, 2014

Resource Nationalism: The Next Chapter

Resource nationalism: The next chapter

Sunday, 05 January 2014 00:00
Lincoln Towindo
Zimbabwe Sunday Mail

Zimbabwe heads into the year 2014 with the Government-led indigenisation and empowerment programme now at full throttle.

From the earlier days of the fast-track land redistribution exercise, the resource nationalism crusade has gradually shifted and snowballed to the indigenisation of the country’s entire economy, including its natural resources.

As is the trend worldwide, Zimbabwe’s resource nationalism thrust seeks to ensure that the local means of production and resources are firmly in the hands of the previously disadvantaged local people.

With the signing into law of the Indigenisation and Economic Empowerment Bill in March 2008, Zimbabwe has undertaken an aggressive resource nationalism campaign since then.

The campaign has seen some Zimbabwean business people, farmers and local communities acquiring a share of economic operations across the local economic landscape.

Though over the last four years that the law has been in force, a number of foreign-owned organisations have acceded to the law while some are yet to comply with the law and appear unwilling to do so.

This has left some Zimbabweans feeling edgy, arguing that enough is not being done to ensure that the marginalised locals own the means of production by getting some equity in foreign- owned firms.

Heading into 2014, millions of Zimbabweans are optimistic that Government will expedite the indigenisation campaign to meet their expectations of an economic renaissance after backing Zanu-PF during last year’s harmonised elections.

This year presents Zimbabwe with an opportunity to speed up indigenisation of its resources and indeed its economy, after four and half years of protracted delays due to the ideological fights that characterised the inclusive Government.

Zanu-PF stormed into power on the back of promises to anchor the country’s economic revival on an aggressive resource nationalism crusade over the next five years.

The party promised the electorate to engineer an economic revitalisation affixed to indigenisation, value addition and employment creation for locals.

According to the party’s winning election manifesto, Zanu-PF has for years now been seized with executing the resource nationalism struggle.

The manifesto says Zimbabwe has, through the Land Reform Programme, indigenised 12 117 000 hectares of land which was previously in the hands of 3 500 white beneficiaries of colonialism over the last decade.

Over that period an estimated 276 600 households have benefitted from indigenised land while over one million jobs have been created.

Massive trickle-down effects on the economy have also been recorded.

The manifesto further stated that around US$7,3 billion will be realised from indigenisation over the next five years and will be channelled towards other economic enabling sectors.

“This includes creating value of US$7,3 billion from the indigenisation of 1 138 companies across 14 key sectors of the economy.

Over US$1 844 223 157 will be created from the idle value of empowerment assets unlocked from parastatals, local authorities, mineral rights and claims and from the State to capacitate Agribank with US$2 billion to finance the stimulation of agricultural productivity, to capacitate IDBZ with US$3 billion to finance the rehabilitation and construction of physical infrastructure, US$2 billion to finance the rehabilitation of social infrastructure and to capacitate Sedco with US$300 million to fund innovative women’s and youths initiatives,” reads part of the manifesto.

Through these initiatives, a total of more than 2 265 million jobs will be created across key sectors of the economy and contribute to export earnings, food security as well as the national purse.

Unsurprisingly, this election message was carried over into Government’s recently adopted economic plan for the next five years, Zimbabwe Agenda for Sustainable Socio-Economic Transformation (Zim Asset).

Part of the lifeblood for the economic blueprint will be drawn from the country’s resource nationalism campaign.

“The plan is expected to consolidate the gains brought about by the Land Reform, Indigenisation and Economic Empowerment and Employment Creation Programmes, which have empowered the communities through Land Redistribution, Community Share Ownership Trusts and Employee Share Ownership Schemes, among others,” reads part of Zim Asset.

Furthermore, among the key strategic master strokes expected to anchor the success of the economic plan will be “availing and increasing economic opportunities for women, youths in conformity with the Indigenisation, Empowerment thrust.”

To further hammer the point home, the Minister of Finance and Economic Development, Cde Patrick Chinamasa, while presenting his 2014 National Budget statement last month, said there is no going back on the country’s indigenisation programme.

He said only when indigenisation is complete in terms of the law “will we call this economy Zimbabwean.”

“I reaffirm that the indigenisation laws are here to stay and there will be no amendment to dilute or annul the indigenisation law,” he said.

“Indigenisation policy is about having more companies of our own where Zimbabweans have a controlling stake such that they make decisions that have a bearing on this economy.”

Against such a background, of strong Government commitment for the programme, Zimbabweans can be rest assured that from 2014, resource nationalism is the game in town.

Now that the country has done away with the political bickering that weighed down the transfer of the local economy into indigenous hands and has a new Government that is committed to seeing the programme in place, delivery should be the driving mantra.

Surely, Zimbabwe cannot afford to be left out while other resource-rich nations continue to bag massive economic benefits from their resources.

Across the world the resource nationalism tide is rising and showing no signs of subsiding.

From the oil-rich Gulf nations, the mineral-rich Australia and Canada, neighbouring South African and a host of other African nations, resource nationalism is the buzz word anchoring development.

Many resource-rich countries are now imposing heavy tax or placing share ownership ceilings for foreigners and Zimbabwe has not been left out.

Land debate has since shifted from the appropriateness and morality of indigenisation to actual implementation of resource nationalism-inclined economic policies.

As 2014 gets into gear, Zimbabwe should dissociate itself from engaging in useless debates on reconfiguring its indigenisation policies.

Instead the country’s focus should be on acquiring what is rightfully hers for the benefit of its citizens.

While the West continues to display immoral intransigence over the Zimbabwean indigenisation model, indications are that these countries are at the forefront of imposing tough resource nationalism laws and taxes on foreign business, especially those in the business of extracting finite and non-renewable natural resources in their respective countries.

According to a recent international survey conducted by Deloitte and Touche South Africa, Zimbabwe is leading the way among the pro-resource nationalism nations on the African continent with an ever-increasing number joining the bandwagon.

The research, conducted last year, concluded that 25 out of 52 surveyed African countries have implemented resource indigenisation policies with a view to increase local or state participation in the economy, while the rest are in the throes of drawing up similar policy frameworks.

Namibia, for instance, is pushing for higher taxes and royalties while minerals classified as “strategic” can only be exploited in partnership with the state.

Tanzania, as is the case with Zimbabwe, is pushing through legislation that illegalises exports of raw minerals.

Zambia and Angola are pushing for an initial 35 percent control on all mining activities while Mali wants at least a 25 percent stake.

In the wake of the Marikana disaster, the South African government has been jolted into action.

Reports in South Africa suggest that the ruling ANC’s research unit has submitted proposals to increase government intervention and control over the resources sector in the country.

Some of the proposals include taking up majority ownership of some of the largest mining conglomerates in the country.

Furthermore, proposals for new and heavier taxes on mineral exports and mining profits have been made as well.

Similar trends are being noted in Nigeria, Sierra Leone, Chad, Uganda, Eritrea, Burkina Faso, Guinea and Ethiopia.

For all these countries, 2014 is a crucial year where resource nationalism is expected to shift a gear up.

Similarly, the Zimbabwean indigenisation narrative should enter 2014 in a new chapter as it is the leader of the pack on the continent.

Now that all the ambiguities and haziness that shrouded the process especially over indigenisation of the banking as well the retail sectors have been relegated to the back burner and Government is speaking with one voice, the indigenisation juggernaut should shift into the next gear.

Mining firms that are yet to provide the funds that they promised to pour into Community Share Ownership Trusts should be held to account in terms of the law.

Clearly, for Zimbabwe and indeed every other resource-rich African nation, resource nationalism is the future.

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