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Share ownership schemes empower communities

19 Sep 2017 at 13:19hrs | Views
Since the adoption of the indigenisation and economic empowerment policy by the Zimbabwean Government ten years ago, a number of communities have benefitted from the programme.  This has helped them to alleviate the economic challenges, which were wrought by the illegal sanctions imposed on the country by the West.

As part of the policy, foreign mining companies are expected to cede 10 percent of their shares to the communities and fund community share ownership schemes so that communities can benefit from the resources in their areas. Over the years, a number of communities near mining areas have benefitted significantly from the policy. The communities surrounding the Zimplats Platinum Mine in Selous namely Mhondoro, Ngezi, Chegutu and Zvimba in Mashonaland West Province formed the Mhondoro-Ngezi-Chegutu-Zvimba Community Share Ownership Trust (CSOT) which the South African platinum company funded to the tune of US$10 million to operationalise it. Additionally, the company completed the process of transferring a 10 percent stake worth US$95 million to the CSOT.

The CSOT invested the US$10 million on the money market and so far it has yielded more than US$2 million in returns, which is being used to attend to community needs such as the building of new schools and the refurbishment of existing ones. The Chegutu-based chicken company, Sable Chickens has partnered with the CSOT and is now a shareholder in the company. During the colonial era it was unheard of for black people let alone communities of black people to own or co-own companies and courtesy of Government's empowerment thrust this is now a reality in a largely rural area.

In Matabeleland South Province, the Gwanda CSOT, which was funded jointly by Blanket Mine, Gaths Mine and Pretoria Portland Cement to the tune of US$6.8 million has also significantly transformed people of the community through various development projects. For example, US$2.5 million of the funds have been set aside for the purpose of various income-generation projects which are aimed at uplifting the people's lives. So far the CSOT has built science laboratories for various schools and electrified clinics among other projects.
The Anglo American Platinum-owned Unki Mine in the Shurugwi area of the Midlands Province also funded the Tongogara CSOT to the tune of US$10 million, US$600 000 of which was shared by 24 wards in the community for various projects. So far the CSOT has built a new school, dam and a shelter for expecting mothers at the Zvamabande Rural Hospital.

The other aspect of the policy focuses on foreign companies in commerce and industry. These are expected to cede 10 percent of their shares to their workers as part of the Government's quest to empower its people. This is the case of Schweppes Africa Holdings where the company's workforce now owns 31 percent of the entity while its management owns 20 percent. The remainder of the company is owned by Delta Beverages.

The deal made headlines when President Robert Mugabe and the then Minister of Youth Development, Indigenisation and Economic Development, Saviour Kasukuwere witnessed the handover of the workers and managers' shares. The Schweppes case has encouraged other companies to comply with the policy. These include the Zimbabwe Stock Exchange (ZSE)-listed crocodile producer, Padenga Holdings and agro-processing company, Ariston Holdings, which announced their compliance this year.

One company, which complied with the policy in its own way, is the Anglo American tobacco processor, British American Tobacco Zimbabwe which ceded 10.76 percent of its shares to the Mount Darwin-based BAT Zimbabwe Tobacco Empowerment Trust and has used US$500 000 for the refurbishment of the Chaminuka Vocational Training Centre. The institution is set to improve the quality of tobacco grown in the area, thereby improving farmers' yields, profits and, consequently, lives.

Although more companies are yet to comply with the policy, those which have met this requirement have impacted the lives of their communities significantly. While other countries in Africa have rolled out their own versions of empowerment programmes these have not endeared their people to the leaders as they have done in Zimbabwe, this is because in some cases, the way the policy was implemented in such countries resulted in the programme benefitting only a few people. Not so in Zimbabwe where even the ordinary people in rural areas have benefited from the policy. This explains why President Mugabe remains popular not only in Zimbabwe, but in Africa and beyond.


Source - Nobleman Runyanga
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