Opinion / Columnist
Zimbabwe: A nation of spenders
15 Apr 2016 at 06:47hrs | Views
PRESIDENT Mugabe's intervention last week in the indigenisation turf war between Finance and Economic Development Minister Patrick Chinamasa on one hand, and Youth, Indigenisation and Economic Empowerment Minister Patrick Zhuwao on the other, may have helped clarify the implementation parameters for the responsible Government agencies, and allay the anxieties of finicky investors and banks, but it certainly did not cure the disease.
What that clarification has not done which is what needs to be done is to rid the nation of a malignant coloniality - the belief that our economic problems can only be solved through foreign investment, on the one hand, and that the indigenisation and economic empowerment policy is right only in principle but inherently bad for implementation.
That is the biggest challenge the country faces, and that has provided the grist of resistance for foreign companies not so keen to comply with this otherwise not so peculiar empowerment tool.
Let's start with the obvious.
I don't understand how my friend Zhuwao got things mixed up.
To a large extent Government, and President Mugabe in particular, has for a long time been consistent on the issue of indigenisation ratios.
The 51-49 ownership ratio applies to the resource sector.
The other sectors have been reserved for indigenous Zimbabweans, such as retail, transport, advertising, tobacco processing and grain milling, among others.
Even the IMF's local pointman on reforms Domenico Fanizza is clear that the 51-49 percent ownership ratio is not a "blanket requirement".
He recently told RFI in an interview published on March 25 2016 that the 51/49 requirement was only for the exploitation of natural resources while for other sectors there were various ways of complying with the indigenisation policy.
We don't want to be the ones creating fresh controversy about Government's position, worse still, controversy stirred by Cabinet colleagues in the same governing party.
And the banking sector is one exceptional case.
Government has allowed for a lot of flexibility and this is not hard to understand.
Banks are merely a medium for people or businesses to transact.
Their customers include foreign investors in other sectors of the economy, not necessarily banking.
Banks don't own the money they keep.
Often they don't own the buildings.
There is little to give to indigenous people, who in the majority of cases are the depositors in those banks.
But the same banks can use their often huge financial reserves to promote economic growth and developing though judicious lending to entrepreneurs in need of loans.
Similarly, like any other employer, banks should be able to empower their own employees through a variety of schemes, including share ownership.
Given the above, it would be patently unreasonable for Government to claim 51 percent ownership of a banking institution short of a purchase of shareholding.
That is why a 20-31 percent indigenous shareholding is acceptable for purposes of compliance with the indigenisation policy.
The IMF understands this position.
Minister Chinamasa and Reserve Bank Governor Dr John Mangudya well understood this position, which seems to have eluded my friend Minister Zhuwao.
For that he got a well-deserved presidential rap on the wrist.
But that, by comparison, ranks as a minor transgression if not aberration.
The bigger challenge is lack of self-confidence among Zimbabweans, the absence of self-esteem, the refusal to believe that sovereignty means we have a right under the UN Charter to determine our destiny as a nation.
The big challenge as a formerly colonised people is that we are scared to assume the full responsibility which comes with independence.
We are behaving like a grown child who refuses to be weaned off his mother's milk.
Monday next week Zimbabwe will be celebrating 36 years since the end of white minority rule.
It will be 16 years since the country embarked on the land reclamation programme, a trailblazing enterprise which has no parallel so far on the continent. It is a programme which has brought with it a lot of agony, a lot of punishment, but we have not been as resilient as Cuba has been.
But still that is a long enough time to have learnt to cope better with our situation without wishing for a return to Egypt.
Thirty-six years of independence and 16 under sanctions, and Zimbabweans don't believe they can run their country on their own.
Let's start with the banking sector. One of the challenges we have is one of foreign currency.
A patriotic banking sector should be able to mobilise national savings and deploy these in more strategic ways to support the national economy.
Not in Zimbabwe.
We are about the only country I can think of where banks discourage people from banking money by levying usurious charges for cash withdrawals or for keeping money in an account.
The result is that very few Zimbabweans want to keep their money in a bank account.
The issue of confidence is secondary.
There simply is no incentive for one to keep their money in a bank.
The banks then turn around and claim they have no money for lending because Zimbabweans have lost the culture of saving from the hyper-inflationary era.
For their part, Zimbabweans now opt to spend all their earnings on consumption.
They would rather keep their money in their pocket. That is why there is a lot of resistance to the adoption of plastic money.
Beyond that, a motor vehicle has become a national fetish.
That means all the money earned by whatever means is quickly exported to bring in a car, second-hand clothes, human hair etc.
We are one amazing country where people don't think twice before spending $20 to watch a musical performance of the most dubious quality so long as the performer is a foreigner.
We are a nation of spenders and we have been noticed. Everybody knows hard currency is cheap in Zimbabwe and they are flocking to gather it on the cheap.
There is no official explanation as to why that is the case.
Daily we have made the issue of liquidity crunch a national crisis yet we export foreign currency in bags.
There is apparently no limit as to how much one can take out of the country. If there is, it's not observed nor strictly enforced.
The quantities of second-hand bales recently intercepted in Mutare and Nyamapanda border speak of huge amounts of cash taken out in broad day light.
And the solution, so we are told, is to abandon the indigenisation and economic empowerment policies because they scare away investors.
In other words we want to consume and not save, but still expect others to save and come and give us their cash in the form of investment!
When all is said and done, there is no problem with indigenisation or black economic empowerment.
There is a problem of people who can't take care of themselves and believe the world has a duty to build their economy.
The issue is not lack of investment. It is first and foremost a refusal by Zimbabweans to save and invest in their own economy.
No amount of foreign investment, direct or otherwise, can satisfy the ravenous desire for foreign consumption.
Indigenisation and black economic empowerment are policies meant to teach to take charge, to produce before we can consume, in Biti's words, "to eat what we gather".
What that clarification has not done which is what needs to be done is to rid the nation of a malignant coloniality - the belief that our economic problems can only be solved through foreign investment, on the one hand, and that the indigenisation and economic empowerment policy is right only in principle but inherently bad for implementation.
That is the biggest challenge the country faces, and that has provided the grist of resistance for foreign companies not so keen to comply with this otherwise not so peculiar empowerment tool.
Let's start with the obvious.
I don't understand how my friend Zhuwao got things mixed up.
To a large extent Government, and President Mugabe in particular, has for a long time been consistent on the issue of indigenisation ratios.
The 51-49 ownership ratio applies to the resource sector.
The other sectors have been reserved for indigenous Zimbabweans, such as retail, transport, advertising, tobacco processing and grain milling, among others.
Even the IMF's local pointman on reforms Domenico Fanizza is clear that the 51-49 percent ownership ratio is not a "blanket requirement".
He recently told RFI in an interview published on March 25 2016 that the 51/49 requirement was only for the exploitation of natural resources while for other sectors there were various ways of complying with the indigenisation policy.
We don't want to be the ones creating fresh controversy about Government's position, worse still, controversy stirred by Cabinet colleagues in the same governing party.
And the banking sector is one exceptional case.
Government has allowed for a lot of flexibility and this is not hard to understand.
Banks are merely a medium for people or businesses to transact.
Their customers include foreign investors in other sectors of the economy, not necessarily banking.
Banks don't own the money they keep.
Often they don't own the buildings.
There is little to give to indigenous people, who in the majority of cases are the depositors in those banks.
But the same banks can use their often huge financial reserves to promote economic growth and developing though judicious lending to entrepreneurs in need of loans.
Similarly, like any other employer, banks should be able to empower their own employees through a variety of schemes, including share ownership.
Given the above, it would be patently unreasonable for Government to claim 51 percent ownership of a banking institution short of a purchase of shareholding.
That is why a 20-31 percent indigenous shareholding is acceptable for purposes of compliance with the indigenisation policy.
The IMF understands this position.
Minister Chinamasa and Reserve Bank Governor Dr John Mangudya well understood this position, which seems to have eluded my friend Minister Zhuwao.
For that he got a well-deserved presidential rap on the wrist.
But that, by comparison, ranks as a minor transgression if not aberration.
The bigger challenge is lack of self-confidence among Zimbabweans, the absence of self-esteem, the refusal to believe that sovereignty means we have a right under the UN Charter to determine our destiny as a nation.
The big challenge as a formerly colonised people is that we are scared to assume the full responsibility which comes with independence.
We are behaving like a grown child who refuses to be weaned off his mother's milk.
It will be 16 years since the country embarked on the land reclamation programme, a trailblazing enterprise which has no parallel so far on the continent. It is a programme which has brought with it a lot of agony, a lot of punishment, but we have not been as resilient as Cuba has been.
But still that is a long enough time to have learnt to cope better with our situation without wishing for a return to Egypt.
Thirty-six years of independence and 16 under sanctions, and Zimbabweans don't believe they can run their country on their own.
Let's start with the banking sector. One of the challenges we have is one of foreign currency.
A patriotic banking sector should be able to mobilise national savings and deploy these in more strategic ways to support the national economy.
Not in Zimbabwe.
We are about the only country I can think of where banks discourage people from banking money by levying usurious charges for cash withdrawals or for keeping money in an account.
The result is that very few Zimbabweans want to keep their money in a bank account.
The issue of confidence is secondary.
There simply is no incentive for one to keep their money in a bank.
The banks then turn around and claim they have no money for lending because Zimbabweans have lost the culture of saving from the hyper-inflationary era.
For their part, Zimbabweans now opt to spend all their earnings on consumption.
They would rather keep their money in their pocket. That is why there is a lot of resistance to the adoption of plastic money.
Beyond that, a motor vehicle has become a national fetish.
That means all the money earned by whatever means is quickly exported to bring in a car, second-hand clothes, human hair etc.
We are one amazing country where people don't think twice before spending $20 to watch a musical performance of the most dubious quality so long as the performer is a foreigner.
We are a nation of spenders and we have been noticed. Everybody knows hard currency is cheap in Zimbabwe and they are flocking to gather it on the cheap.
There is no official explanation as to why that is the case.
Daily we have made the issue of liquidity crunch a national crisis yet we export foreign currency in bags.
There is apparently no limit as to how much one can take out of the country. If there is, it's not observed nor strictly enforced.
The quantities of second-hand bales recently intercepted in Mutare and Nyamapanda border speak of huge amounts of cash taken out in broad day light.
And the solution, so we are told, is to abandon the indigenisation and economic empowerment policies because they scare away investors.
In other words we want to consume and not save, but still expect others to save and come and give us their cash in the form of investment!
When all is said and done, there is no problem with indigenisation or black economic empowerment.
There is a problem of people who can't take care of themselves and believe the world has a duty to build their economy.
The issue is not lack of investment. It is first and foremost a refusal by Zimbabweans to save and invest in their own economy.
No amount of foreign investment, direct or otherwise, can satisfy the ravenous desire for foreign consumption.
Indigenisation and black economic empowerment are policies meant to teach to take charge, to produce before we can consume, in Biti's words, "to eat what we gather".
Source - the herald
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