Base indigenisation model on merit: analyst

By Eric Chiriga

Zimbabwe’s indigenisation model will create parasitic business owners, but not institutional value or iconic brand creators, blogger Kufara Gwenzi says.

He said government should use a “merit-within-need’ approach to ensure that those assisted by the National Indigenisation and Economic Empowerment Board (NIEEB) and other funding institutions demonstrate a high potential of business achievement, genuine financial need, and potential to create new jobs, new products and new markets.

“We can all rush and scramble for the existing commercial entities for short term gratification,” he said.

He said if government has enough funds to “takeover” or buy majority stakes in the existing foreign businesses, it should instead mobilise them to start new businesses and new products. Gwenzi said government should avoid the mistakes made in the takeover of farms under the land reform programme.

“While most established companies in Zimbabwe were created during the colonial era, one cannot treat their ownership like we did with the skewed land ownership before the land reform programme,” he said, adding that ownership and creation of a businesses was a product of intellectual work.

Gwenzi said economic empowerment should be about entrepreneurship.

“It is a practice of starting new organisations or revitalising mature organisations, particularly new businesses generally in response to identified opportunities.”

Gwenzi said government should also consider empowerment by giving indigenous people access to skills, resources and opportunities through business-friendly policies to realize their full potential and take control of, and responsibility for, their own lives.

“It is empowerment when barriers of business entry or opportunities are minimized because owning or investing in Zimbabwe by a non-indigenous Zimbabwean or a non-Zimbabwean should not be criminalised,” he said.

Gwenzi also said that locals should be empowered to be able to establish new companies, which will result in new jobs, develop new products ahead of the market and create or expand new markets.

“Economic empowerment should be about entrepreneurship, which is a practice of starting new organisations or revitalising mature organisations, particularly new businesses generally in response to identified opportunities.”

This comes after Indigenisation minister Saviour Kasukuwere last week controversially rejected foreign banks’— Standard Chartered Bank and Barclays Bank of Zimbabwe — empowerment proposals and threatened to withdraw their licenses within a fortnight, causing panic among foreign investors.

Other affected foreign firms include British American Tobacco (BAT), Cargil Zimbabwe, diamond miner Mimosa, Murowa Diamonds, Nestle and Zimbabwe Platinum Mines.

According to statistics, about 700 foreign-owned companies have submitted their empowerment plans — of which 175 were mining companies, hoping to sell only 26 percent and have the balance fulfilled by social investment credits.

Kasukuwere’s move dashes hopes and optimism that the government was not going to implement the controversial plan in its present form after a downward review of fines due to non-compliant firm. Daily News