Thursday, March 31, 2016

Foreign, Domestic Interests Must Co-exist
March 31, 2016
Zimbabwe Herald

LAYING DOWN THE LAW . . . Minister Patrick Zhuwao addresses a Press conference where he explained the modalities of the law in relation to indigenisation

Tafara Shumba

Following Government’s decision to withdraw operating licences of companies that will not submit their indigenization implementation plans by March 31 2016 (which is today), there has been an unprecedented outcry, coming mostly from the usual “hired mourners” who have now developed a knack for crying more than the bereaved.

The Government’s decision has been very topical in the media, opposition political parties and civic society. The decision received undue and vicious attack from a constituency that seems to be in total darkness of the contents of the recently fine-tuned law. It is, however, refreshing that the responsible minister, Cde Patrick Zhuwao, dedicated a day to shedding light on those who care to be enlightened.

Unfortunately, the hired mourners will be certainly nowhere near the venue to be schooled on the law they are blindly attacking. At times it is necessary to separate a message from the messenger in the national interest. Parochial interests must not always blight good ideas. Like him or not, the idea that Cde Zhuwao is advancing on behalf of Government is great.

Some companies have read the modified Act and managed to pick up the sensibleness in it, resulting in 50 of them submitting their plans in the nick of time. It’s better late than never.

It therefore makes business sense for companies that have not yet complied with the statutory directive to do so and avoid unnecessary loss of business and profit. The prime reason for their existence is profit making. Thus, that profit must be made within the confines of the laws governing the environment they are operating in.

During Zanu-PF’s 15th Annual People’s Conference in Victoria Falls, President Robert Mugabe reiterated that Government would not tolerate companies that refused to comply with indigenisation. As the Chief Executive Officer of this country has already declared, companies have no choice but to comply. Of course, the indigenisation law might still have some rough edges; nevertheless, it still remains a law whose terms must be met. In military parlance, one is supposed to complain after duty. The concerned firms must meet the terms of the law first and raise their objections, concerns and suggestions later. In this way, chances of getting an audience with authorities are high.

These affirmative laws are not peculiar to Zimbabwe. Every country has its own way of making sure that the natives participate in the economy. According to economic history, every successful economy has used nationalistic policies. In the UK, for instance, the government is set to deport all migrant workers who earn less than £35 000 per year. This is meant to protect the local job market. The highest shareholding interest that Germany can give to a foreign investor is a mere 8 percent.

Despite their barrage of criticism of the Zimbabwean indigenisation programme, most of the rich European countries – at one a time – embarked on some form of indigenisation programmes. Indigenisation and economic empowerment programmes were a success story in recently emerged economic giants such as Japan, China, Singapore, Malaysia, South Korea and even South Africa as well as Namibia.

Zimbabwe as a nation upholds the rule of law. This is despite criticism and false accusations that the country does not respect same. It is rather these impudent companies and those that are cheering them into crime which do not respect the rule of law.

As Friedrich Hegel noted, we have learnt from history that we do not learn from history. The destructive path that these firms want to take is a cul-de-sac. The Daily News trod it in 2003 when it refused to register with the then Media and Information Commission (MIC) in accordance with the Access to Information and Protection of Privacy Act (AIPPA). As a result of this senseless defiance, the paper closed shop in September 2003 and sent dozens of scribes on to the streets. Ironically, the major victims were the very scribes who incited the paper’s proprietors to flout the law.

The closure of companies defying the law will render more workers jobless. They will join thousands of other workers who lost their jobs following a Supreme Court ruling which gave employers a blank cheque to fire employees willy-nilly. Zimbabwe cannot afford to witness another spate of job losses, more so when Government is struggling to avail jobs promised in the Zimbabwe Agenda for Sustainable Socio-Economic Transformation (Zim-Asset).

What this means is that the issue must be approached with caution. There must be a balance between IEE and attracting foreign direct investment (FDI). During his visit to China last year, Vice President Emmerson Mnangagwa assured Chinese investors that indigenisation was not a threat to the interests of investors. As such, Government must stick to that assurance. Both the Government and the companies must consider the risk of job losses which their decisions on this issue are likely to cause. The companies must not take advantage of the country’s desperate need for investment and job creation to hold Government to ransom.

On the other hand, Government must not be lost to the economic environment prevailing in Zimbabwe. The indigenisation policy is a great policy that must be implemented methodically. Government must do away with all the stumbling blocks that will give credence to the arguments advanced by detractors against the indigenisation policy. For instance, ridding the country of corruption and creating stable political and economic environments must be prerequisites for a successful indigenisation of the economy.

The indigenisation programme must prove wrong detractors who always claim that the initiative benefits the elite and the well connected. The initiative is a process and five years down the line, Government should be able to pick a beneficiary from Murambinda or Mutoko. Indigenisation must not only replace white capitalists with black ones.

Hopefully, the indigenisation programme will maximise local retention of profit and curb the externalisation of national resources as witnessed in the diamond mining sector.

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