'We've destroyed indigenisation'

THE recent developments at Barclays Bank Zimbabwe have confirmed our greatest fear that indigenisation and economic empowerment would not survive in its original form, given that government ministers understand and interpret it differently.

Some key civil servants doubt its utility and the so-called investment community have relentlessly poured cold water on it and threatened not to invest in the country unless it was changed in their favour.

Those who see the programme as motivated by racial motives and political interests have done everything they can to discredit the law.

The purchase of a controlling interest in Barclays Bank Zimbabwe by the First Merchant Bank (FMB) of Malawi, notwithstanding the narrow internal contradictions between the local staff and their management, takes away the vitality of indigenisation as an instrument of economic inclusion and development.

In fact, after this deal, it may just continue to exist for romantic purposes only.

There is no way that this policy will continue to enjoy its popularity among the majority of Zimbabweans who mistakenly believed that the restoration of their identity and indeed the recovery of their economic space that was taken away from them by the colonial system would be facilitated by the introduction of the Indigenisation and Economic Empowerment Act.

In its form, intent and objective, the Indigenisation and Economic Empowerment Act was a reaction to the marginalisation, if not exclusion, of the indigenous people from participating in all forms of national life and to make it worse, the white settler regime determined this whole structure on racial lines.

The subject of indigenisation and economic empowerment is a hot issue because most of the indigenous people see it as a genuine policy designed to bring them on even terms with those who succeeded on the back of racial discrimination.

Most importantly, it gives the majority of the people hope that one day they too can own the means of production and run their own businesses and contribute to economic development.

The change of direction by government on this policy raises a lot of questions about their political will and commitment to this programme.

Remember that when the colonial system entrenched itself, one of the major sources of their success was based on the annexation of all rich and productive land, building commerce and industry on the back of poor wages, condemnation of the indigenous African people to arid and poor land and denying them as a matter of policy any access to the economy on business basis.

They followed their decisions with effective law meant to ensure compliance and for all we know, rightly or wrongly, they stuck to their guns and fought to the bitter end to sustain their beliefs and policies.

They never regretted and still believe they were right in doing so to this day.

Alas, the majority of the indigenous people are still on the margins of the economy with the vast majority engaged in the now very famous informal sector and cut away from the formal economy which even though struggling gets all the attention some of which it does not deserve.

An impression is created that Zimbabwe is alone in its quest to open economic opportunities to its majority black population.

This is far from the truth because over the entire decolonisation period, African countries have pursued indigenisation of one sort or another. Currently, South Africa, Namibia, Botswana, Zambia, just to name a few around us, have some form of indigenisation programme in place and yet no one raises any concern about these issues at all.

Studies show that in East and West Africa, these programmes do exist and as such, the undue opposition to the Zimbabwe version of a policy that is widely adopted by many countries in the world is unwarranted and causes unjustified reputational damage to the country.

The bottom line is that Zimbabweans have a right to claim ownership, of resources available in their country.

Why should it be right for mature jurisdictions to impose conditions that protect and advance the interests of their people and when we do the same we are pilloried for it?

The use of failed banks as an excuse to simply let go of the law has no merit at all.

There have been spectacular bank failures in advanced economies but the difference is that they seek to understand the underlying causes and go on to correct them and close all the gaps. Instead of picking up one single factor and blame it for everything in the banking sector, it is advisable that we look at the total picture for possible causes of failure and difficulties and work on solutions thereto.

Against this background, it is not surprising that FMB succeeded in their bid for the control of Barclays Bank Zimbabwe because government cleared all the potential hurdles by rendering the law totally inoperable in the banking sector.

This deal is not the first one that was allowed to operate without going through the scrutiny and provisions of the Indigenization and Economic Empowerment Act.

BancABC, Premier Bank and Kingdom Bank (Afrasia) went through the same process.

Why are we surprised by this recent move at Barclays?

This is the new trend and unfortunately, we are going backwards in this sector.

Those who say indigenous people cannot run and manage banks have no valid argument at all.  While individual weaknesses should never be tolerated in the management of banks, there is need to build an environment that supports banking business.

For all practical purposes that environment is far from existent and that partly contributes to the myriad of banking challenges that we are currently experiencing at the moment.

Does the answer lie in selling all our banks to anyone who makes an offer to buy? I certainly and boldly believe that there is a lot we can do to stop draining the confidence in our banking sector by taking decisions that bolster and support the efforts of all local banks.

While we appreciate the need for cooperation with the world around us, but there should a limit to which cut and paste policies should dictate the long-term interest of our country.

I should not sound like I do not recognise that some partial good work was and has been done in respect of economic empowerment. I think the community share ownership schemes and employee share ownership schemes are good in themselves but they are too remote from reality and rather peripheral in their nature in terms of their impact on society.

It is important to have people that own entities in all sectors of the economy and no sector should be out of reach for the indigenous person and the law must be design and managed to achieve that objective. Lest we forget, the primary purpose of these policies is to mitigate and hopefully eliminate poverty which is visible everywhere.

I do not know whether we can successfully achieve this by parcelling out some of our strategic assets or resources?

The obsession with globalisation and its perceived benefits is a bit farfetched because the jury is still out there regarding the efficacy of embracing this notion of a global village. We are far from ready to participate on even keel with the biggest economies of the world.

Our institutions are still very much weak which is why we must remain vigilant and avoid being overrun by global forces that leave us even weaker.

My fear is that we have listened too much to institutions and investors that still have to commit to Zimbabwe and some have been given that privilege to enter the economy on very good terms but there is no visible outstanding difference they have made to this economy.

On the contrary, some have been accused of possible externalisation. There is need to balance between foreign investors and our local businesses in terms of focus, facilitation and incentives because we cannot completely build an economy on the back of foreign interests alone.

There are programmes that have done very well and government must be commended for doing everything possible to support these areas of economic activity for example, the tobacco and cotton farmers who are exclusively indigenous are a really good example of how indigenisation can change the lives of people if government provides the essential back up services and systems.

Of course, in order to complete the cycle, it is important that the farmers begin to invest in higher value chains for the transformation of our industry and commerce. Currently, Zimbabweans are talking about the impact of Command Agriculture and how most people at the lowest possible level in society can relate to it.

We need programmes and decisions that have an impact on the majority of the people and not just a handful.

Whatever decisions and changes that government wishes to make on our laws especially those designed to take people out of poverty, the aim must be to reduce the number of people that remain rather vulnerable to fragile livelihoods because that has the danger of creating a social and economic underclass and that state of affairs is not the best for a stable and inclusive society.

If indigenisation can work in one sector, there is no reason why it should not work in every other sector.

We need to be patient, systematic and consistent in pursuit of our national goal of creating an empowered society. We will fail if we succumb to visions of Zimbabwe crafted elsewhere. Our indigenisation and economic empowerment programme is in danger of being pushed into a policy trash bag to the detriment of our people.

Davison Todson Gomo is a development economist and international trade lawyer. The views expressed in this article are his and have no bearing on organisations he is associated with.