Thursday, April 22, 2010

Zimbabwe Minister Says Empowerment Not For Fat Cats

Empowerment not for fat cats

FULL text of the statement delivered by Honourable Saviour Kasukuwere, Minister of Youth Development, Indigenisation and Empowerment, updating the media on implementation of the National Economic Empowerment Programme on Tuesday.

LADIES and gentlemen of the media, I thought we should meet once more to update each other on the implementation of the National Economic Empowerment Programme.

In fact, this meeting has been made all the more urgent by conflicting statements made last week in the name of Government.

I wish to make it abundantly clear that this country, through its sovereign Parliament, passed a Bill called the Indigenisation and Economic Empowerment Bill, which was subsequently assented to by His Excellency the President, Cde R. G. Mugabe in January 2008, thereby making it an Act of Parliament. Needless to say, that law exists on our statute books. It has not been repealed. Certainly, it cannot be repealed by word of mouth or wishful thinking.

My ministry took a further step to develop and amplify on the law through a set of regulations. I am happy to inform you that these regulations have been passed to be consistent with the primary law.

Happier still, I wish to inform you that the regulations have started achieving the intended goals of the law, namely to ensure a 51/49 ownership structure in our economy. To date, foreign companies operating in Zimbabwe have taken note of the law, with upward of 400 companies having already taken measures in compliance with that law, by way of submission of IDG01 forms, which detail the entire shareholding structure.

Let me take this opportunity to sincerely and profoundly thank all our corporate citizens who have or are in the process of compliance with the law for responding positively to this national call and showing exemplary corporate citizenship.

In the same vein, I want to thank the inclusive Government for being of one accord on this very important matter. Contrary to media reports that seemed to suggest a divided Government, I readily and confidently tell you that on this matter, there is unanimity in Government and in the respective parties.

Guided by the submissions already done and feedback from other corporate players, Government at its Cabinet sitting last acknowledged the pressures faced by reporting companies in meeting the deadline.

It has to be appreciated that a good number of the companies which are affected by this law are domiciled abroad and have intricate shareholding structures, which make their decision- making process drawn out.

In recognition of this reality, Government decided last week to extend the deadline in the regulations by another month. This means that the closing date for submissions, which, in terms of the regulation, fell on the 15th of April, has been extended to the 15th of May 2010. I hope this puts to rest all the speculation on this matter.

The feedback we have from reporting companies has made Government aware of valid concerns, which Government is only too happy to take on board in order to improve the regulations.

Some of the concerns raised relate to interpretation of the word "cede" in relation to shareholding, which was misconstrued to suggest compulsory takeover without compensation, issues related to achieving broad-based ownership in the course of indigenising the economy so that benefits are equitable across class, gender and age and the consideration of unique requirements of different sectors.

Colleagues, allow me to share with you our vision and direction with respect to these issues. The indigenisation programme is based on fair transaction, where full value is compensated for. In that context, the word ‘‘cede" merely refers to the compulsion to comply with 51/49 shareholding structure, but within a business transaction.

There are strategic sectors, particularly those to do with non-renewable resources, where the nation must share in value. In these sectors, transaction aimed at the desired shareholding are compulsory.

A specific example is the mining sector, where resources are non-renewable. Again, I am happy to announce that Government has unanimously decided that implementation of our indigenisation policy starts with the mining sector.

In framing the law, Government is guided by the all-important principle of broad-based empowerment of the indigenous people. This is no law for fat cats — it is a law for all cats which must grow fat at the end of the day.

To that end, the programme will be broad-based in thrust, paying particular attention to the youth who have borne the brunt of unemployment, the women who have suffered double oppression, the workers who have toiled from time immemorial for repentance in the land of their birth and the disabled who are a measure of fairness in any society.

Equally important and pressing is an anomaly which has existed in our country for a very long time, where communities hosting mineral resources have been condemned to be impoverished bystanders as those resources are exploited by outsiders for their own benefit.

This law takes a stand in defence of these marginalised communities, who must now be organised around community trusts for purposes of empowerment.

Ladies and gentlemen, let it be appreciated that the programme of economic empowerment is itself a panacea to the problem we have always faced, namely that of externalisation. We have lost millions of dollars through this corporate vice perpetrate through offshore banking and inflated dividends, among other ills.

Already, we have before us a report from an internationally reputed group of auditors, which has exposed massive prejudice to the State through externalisation. In situations where this economy is controlled locally, with the State having an overriding interest, such prejudice is minimised if not eliminated.

Let me be a bit reckless and share with you an observation made by His Excellency the President, Cde R.G. Mugabe this morning. Warning against the dangers of black masks for white corporate faces, the President emphasised that the programme of indigenisation should not be an avenue for creating pseudo-owners who are mere fronts or blacks who slide into the same shoes of exploiters and externalisers for the benefit of the metropolis.

Government has also made it clear that certain sectors shall be an exclusive preserve for indigenous players.

Taking the property market and retail business as immediate examples, Government has noted with alarm the displacement of indigenous traders and small business people in the downtown premises, growth points and rural business centres.

Indeed, we have had demonstrations here in town from our people so badly hurt. As the minister responsible, I want to assure all those affected that their concerns are legitimate and will be addressed in the context of implementation of this law.

In implementing the policy, Government will look for empowerment opportunities along the whole value chain including principally, procurement decisions, which corporate bodies will make as they source inputs into their processors.

I confirm that as we continue to refine our regulations, we will emerge with measures that are sector-specific and sector-sensitive, as requested by our corporate bodies.

In respect of this matter, and in order to achieve closure, Government will bring forward gazetting of sectoral thresholds from the original 12 months to four months.

This will be a consensual decision involving the affected sectors and individual companies.

I thank you.

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