Indigenizing Zimbabwe; a new approach

Most indigenization or empowerment projects have failed to address the most basic needs of our communities

I have been having some interesting conversations with several Zimbabwean youths who have been waiting in vain for the youth indigenization funds to be disbursed. According to them, despite submitting impressive project proposals, there has been no official feedback. The word in the market is that not much funds have been disbursed to date and only those politically connected have benefitted. There is nothing new in that. I have heard horrible stories of how in Zimbabwe business project proposals can be stolen or can simply disappear from the office only to find that the project has been hijacked and implemented elsewhere.

The sale of equity stakes to black equity partners in established businesses is an old empowerment model that has proved totally insufficient and inappropriate in meeting the aspirations of blacks. The reasons for this are obvious; no value is created by such transactions and unless the new shareholders have skills to run the new entity, they end up being passive investors who wait for dividends to service the acquisition debt because they have no money to put on the table.

The second level of empowerment, which I think would be a more appropriate approach for Zimbabwe, is the requirement that established businesses assist to develop black enterprises (enterprise development) and also ensure that black businesses, especially SMME's become part of the supply chain through affirmative procurement processes. In Zimbabwe we already have the Small Enterprises Development Company (SEDCO) which is an ideal platform to implement these policies. We do no therefore need additional empowerment boards because they invariably end up being a "jobs for pals" exercise and this is surely the most inefficient way to allocate scarce resources.

I think there is the mistaken belief especially by politicians that ordinary Zimbabweans want to own shares in foreign owned companies that is not true at all. Most Zimbabweans are really concerned with survival issues especially the issue of high energy costs which are devastating their ability to achieve economic freedom. They are also concerned with the low quality of life resulting from lack of development in their neighborhoods.

I have been going around Highfields, a township in Harare where I was born and I have been devastated to note that there has been no significant development since 1980. In fact, standards of living have deteriorated significantly since then especially with regard to a clean environment, working street lights, improvement of schools, access public amenities and access to general services.

From my conversations, these township communities do not really care who owns the banks or the insurance companies for example. My point here is that, to date, most indigenization or empowerment projects have failed to address the most basic needs of our communities. Establishing what I term township development forums, for example, that involve communities in the development and upkeep of their neighborhoods is for me a far more a noble venture than paper chasing indigenization transactions that only benefit a few urban and politically connected few.

The fundamental mistake that South Africa made in its effort to empower blacks was to separate the development of local communities and the improvement of the quality of their lives with black economic empowerment. They now sit with a huge problem in that a black elite sits in Sandton while townships are burning. The masses have once more born the brunt of politically expedient economic policies.

I support indigenization full heartedly and I continue to hope that the minister responsible will listen and include as many Zimbabweans as possible in coming up with new approaches to indigenization that are holistic and sustainable in nature but I shall not hold my breath.

Let us not repeat the same mistakes that South Africa made.

------------------
Vince Musewe is an independent economist currently in Harare and you may contact him on vtmusewe@gmail.com