State doublespeak leaves indigenisation policy hazy

The Zimbabwe government will not be unveiling any new indigenisation thresholds for nonresource-based sectors, an about-turn that brings into question the government’s sincerity in following through its commitment to soften its 51% indigenisation law.

Francis Nhema, the indigenisation and economic empowerment minister, told the Mail & Guardian this week that the 51% indigenisation threshold will, in fact, be maintained and applied to other economic sectors – outside of mining – as gazetted under general notice 280 of 2012.

Media reports on May 25 in the state-owned Sunday Mail newspaper indicated that the government was in a “major climb-down” in its empowerment programme and carried an interview with Media, Information and Broadcasting Services Minister Jonathan Moyo.

“We are reviewing and tightening the indigenisation and empowerment policy by being pragmatic without being dogmatic about it,” Moyo was quoted as saying.

“Foreign investors will be allowed to recover their initial capital investment, an appropriate return on investment and operational costs, before the sharing of production outputs or profits.”


Misinterpretation of policy
But in a strange attack, the Herald newspaper, which is in the same Zimpapers group as the Sunday Mail and is also state controlled, said its sister publication had misinterpreted the indigenisation policy.

“The problem is that there is, in fact, no such ‘climb-down’ … [the] government is, in fact, digging in and has actually ‘climbed up’ in requiring that Zimbabweans will, in fact, own 100% of their resources,” it said in an opinion piece on May 27.

The latest round of doublespeak signals how the government has been talking right and yet walking left on the empowerment programme, which is what has unnerved foreign investors.

Nhema’s hardened stance in imposing a 51% indigenisation threshold comes more than a month after President Robert Mugabe spoke of a softened tack on indigenisation, saying a one-size-fits-all approach is inappropriate for all sectors.

Mugabe was supported by Patrick Chinamasa, the finance minister, who said the transfer of the 51% indigenisation stake would be applied only to the mining sector.

In April Chinamasa said Nhema would put together a “sector-by-sector” indigenisation threshold that would be presented to the Cabinet and applied to nonresource-based sectors.

‘Nothing new is coming up’
Nearly a month later, there are still no signs of any new indigenisation thresholds having been tabled before the Cabinet. Nhema told the M&G his ministry would not come up with any new thresholds for indigenisation, but would make use of the existing provisions under the current Act.

“Those are the same thresholds that we will be applying for indigenisation in the other sectors. Nothing new is coming up,” said Nhema.

The current Act targets multiple economic sectors – including tourism, financial services, education, sport, culture, engineering, construction, energy, telecommunications, transport and the motor industry – requiring all of them to abide by the 51% local ownership stipulation.

The general notice is the same piece of legislation used by Nhema’s predecessor, Saviour Kasukuwere, who at the apex of his tenure was pushing for the takeover of foreign-owned banks.

Walter Chidakwha, the mines and mining development minister, said mines are now warming to the indigenisation law.

“The restatement of the policy made by Mugabe recently affects mainly the nonresource-based sectors more than the mining sector. From our industry and mining perspective, the 51% indigenisation threshold has not changed at all,” said Chidakwha.

Changing the indigenisation law
Economic observers have called on the government to follow up on its softened tone with legislation that would provide assurance to foreign investors.

Eric Bloch, a senior partner at H&E Bloch Consultancy, said a government with enough willpower could change the indigenisation law.

“The trouble is that our government knows how to work at three speeds and that is slow, very slow and stop,” said Bloch. “They can change the indigenisation law fairly rapidly, as some of the sections do not need Parliament’s approval. Because of the urgent economic issues that the government is faced with, it can prioritise this and push through for changes.

“I, however, suspect that the indigenisation minister may be playing down the changes for the indigenisation thresholds for now, as he does not want to stir up more confusion over the issue, or may genuinely have missed Cabinet meetings where the issue has been brought up.”

Subscribe to the M&G

These are unprecedented times, and the role of media to tell and record the story of South Africa as it develops is more important than ever.

The Mail & Guardian is a proud news publisher with roots stretching back 35 years, and we’ve survived right from day one thanks to the support of readers who value fiercely independent journalism that is beholden to no-one. To help us continue for another 35 future years with the same proud values, please consider taking out a subscription.

Related stories

Police keep Tsvangirai in their sights

Zimbabwe opposition leader Morgan Tsvangirai may want to up his street cred, but he'll have to find a way to leave the house first.

Battling Zanu-PF calls in its debts

It's payback time for those who can't afford to say no to the ruling party preparing for its congress.

Taxpayers expected to rescue Zimbabwe’s Reserve Bank

Political largesse broke the Reserve Bank of Zimbabwe; now the state wants the public to fill up the coffers, but they are not amused.

Dr Grace brings disgrace

The questionable award of a doctorate to the first lady threatens to tarnish the University of Zimbabwe's reputation.

Mugabe caps Grace with a doctorate

Doubt has been cast on the authenticity of the first lady's PhD, which bolsters her bid for a top party post.

Weighty role of the Zim diaspora requires re-examination

The Zimbabwe diaspora continues to play second fiddle in the country's politics and has remained at the mercy of various political agendas.
Advertising

Western Cape warned not to be complacent about flat-lining Covid-19...

The Western Cape, which once had the highest number of Covid-19 cases in South Africa, is seeing a steady decline in active cases

Sisulu axes another water board

Umgeni Water’s board in KwaZulu-Natal was appointed irregularly by her predecessor, the water and sanitation minister claims
Advertising

press releases

Loading latest Press Releases…

The best local and international journalism

handpicked and in your inbox every weekday