There has been a flurry of activity following the gazzeting of the Indigenisation and Economic Empowerment (General) Regulations. A lot of emotions have been expressed: joy, dismay, anger and indifference. These have been the typical responses to most of the sensitive issues that have challenge our country and it is expected in such a highly polarized country. This divergence has done a lot of disservice to our country in that public opinion is usually dictated by voices wearing political and therefore blinkered voices. Indigenization and Economic Empowerment are issues that need to be looked at holistically as they are the cornerstone of justice and ultimately peace in any country.
There are number of facts that we need to note before probing the status quo. It is true that prior to 1980 non-white Zimbabweans were discriminated against economically, socially and politically. Economic discrimination took root on inaccessibility of Education, mode of production and business freedom. Blacks in Rhodesia were restricted from economic activity. Commercial agriculture was skewed towards whites as they alone had unfettered access to commercially viable land. Blacks had other restrictions too which included bottle-necking at schools. One had to be exceptionally brilliant and lucky to reach university while whites found comfort in numerous whites-only schools, scholarships and government assistance. In short; historically blacks were disadvantaged.
Independence brought with it freedom and schools. People could now walk freely in Harare’s First Street. People could now drink brown bottled beer and whisky which used to be a criminal offence prior to independence. Primary and Secondary Schools mushroomed all over the country and education was opened up to every Zimbabwean. In 2000 Zimbabwe had more than six universities as compared to one in 1980. Zimbabwe had reached a milestone in education.
Did political independence bring with it economic independence to blacks? This can be answered by examining the distribution of wealth and resources across races.
The Land Apportionment Act of 1930 prohibited blacks from owning land in the lucrative “European Areas”, it even prohibited them from owning land in Tribal Trust Lands which were of ecologically poor. This act guaranteed that less than 1% of the nation owned approximately 80% of arable land in Zimbabwe. Very few blacks managed to purchase land in urban and commercial farming areas where private ownership of land was allowable. Most of them had to be contend with life in the communally owned Tribal Trust Lands. The implication of this Act on black empowerment can never be overlooked as it unfairly disadvantaged blacks especially regarding access to capital. Communally owned lands cannot be used to guarantee loans whilst title deeds from private ownership of land are major collateral. Secondly, this Act forced blacks into marginal areas where economic activity was minimal reducing them to cheap labor and not a people capable of economic activity.
Let us look at the distribution of industrial and commercial enterprises in Zimbabwe after independence. In a report done by OTM Consultancy for IBDC in 1994 it was noted that blacks who happened to be 95% of the population owned only 1% of these. Whites who were 3% of the population owned 30% of the industries and commercial enterprises whilst the Zimbabwe Government owned 4%. The rest was owned by foreign multinational companies. These figures show us that despite their huge population, blacks in Zimbabwe were owned very few businesses.
It is clear therefore that political independence in Zimbabwe did not come with economic empowerment of those who had for long been marginalized. The question we now ought to examine is whether this lack of economic power was all due to historical injustices or some other causes. This interrogation can help us approach the issue of Indigenization with an open eye.
Firstly let us look at the government’s policies towards private business. When the Marxist government of Robert Mugabe took over, it adopted a socialist approach towards business. More emphasis was placed on formation of cooperatives and not private business. A lot of Ujamas erupted across the country. These flourished for a short while but because a cooperative is usually tedious and full of mistrust and suspicion many crumbled. Those who dared to enter into private business found the environment hostile to capitalism. The government introduced price controls between 1980 and 1981 which made it economically unviable for emerging business people. These restrictions stifled growth.
The financial system that the government inherited and adopted was risk averse with more emphasis on conservatism than business adventurism. What this meant was that most financial institutions demanded high collateral for any loans that they would issue. Despite the knowledge of the handicaps that blacks faced, the government did not intervene to assist; rather it left everything in the hands of institutions like Small Enterprise Development Corporation (SEDCO) which issued short-term and long-term loans which obviously were guaranteed by collateral.
This is the issue that led to phenomenon that was then called “Institutional racism”, where blacks failed to gain loans from financial institutions whilst whites seemed to easily secure them. Blacks had no collateral, whilst whites could afford it.
Not all blacks didn’t have start-up capital; some did have but why did they fail to start thriving businesses in Zimbabwe? Let us again examine the Zimbabwe Government’s hand in this. There were pieces of legislation in Zimbabwe that made starting up a business tedious rather than exciting. Let us for example consider the processes that were involved in starting up a company. First there was Company Name Search, followed by Memorandum and Articles of Association, then Certificate of Incorporation. This alone could take up to a year to complete even though officially it was projected to be a month. If one wanted to then enter into Hotel and Catering, he would have to apply to the Zimbabwe Tourism Authority which was under Ministry of Environment and Tourism, if he intended to then ferry his clients around in a bus he would have to apply for another license from the Ministry of Roads and Transport. His premises had to be inspected by the Local Government and he also needed a clearance from the Ministry of Health. All this could take another two years. How on earth did the government expect its people to participate in economic activities under such strenuous and unfriendly demands?
The government knows about these restrictive laws that are present because in 1994 the Deregulation Committee set up by the government to look into the laws identified 28 Acts that were impediments to business and therefore needed to be amended urgently. Unfortunately very few were amended and even today the government still uses these shamed laws to act on its citizens.
We need not look further than Strive Masiiwa’s battle to set-up Econet wireless to identify the hypocrisy of the Zimbabwean Government. In 1993, Masiiwa secured a US$40 million loan from Standard Chartered Bank to launch his telecommunication business. Here was a black man with a brilliant idea, who approached a foreign owned-bank in Zimbabwe and secured a loan. He approached Post and Telecommunications Corporation (PTC) for licensing but they told him that only PTC could do such a business under the Zimbabwe PTC Act. Initially he had approached them for a joint venture but they declined saying that there was no immediate demand for mobile technology in Zimbabwe. He appealed to the High Court and got a favorable verdict from Judge Gibson. PTC appealed to the Supreme Court and they won.
Masiiwa then made a constitutional challenge which ruled in his favor in August 1995. Unfortunately, President Robert Gabriel Mugabe invoked the Presidential Powers Act to issue a Presidential Decree requiring private parties to obtain a license from the Ministry of Information, Post, and Telecommunications before setting up a cellular network effectively overturning the decision of the Supreme Court and restoring PTC’s monopoly. The battle took another two years and it was only after the intervention of Joshua Nkomo to force Rejoice Mujuru then the Information minister and currently the Vice-President to license Econet.
Masiiwa is not the only black businessman who has been persecuted by Zimbabwe’s government and its horrendous laws. Many names come to mind, Mushore, Muponda, Kuruneri, Makamba and many minor ones like Daniel Chingoma whose dream of flying his helicopter will never see light of the day due to restrictions imposed by the aviation laws.
Let us not forget the then emerging black businessmen like my brother Tobias who owned five tuckshops in Chitungwiza which were all razed down during the infamous Operation Murambatsvina in 2005. I have no doubt that if the ZANU PF government had not destroyed his tuckshops he could be having a decent supermarket maybe employing ten more people. Today he is a pauper selling matches and cigarettes at Makoni Bus Rank.
The question we ask today as Minister Kasukuwere gazettes his regulations is whether the Government of Zimbabwe is being truthful in its quest for indigenization or it’s another ploy to empower a few using the guise of futile populism.
Let us not forget that this is the same government that has presided over Zimbabwe for the past 30 years. It is the same government that has presided over the demise of the country. It is the same government that been brutal to its own people and it is the same government that has grabbed and expropriated land amongst itself. What has really changed today that this brutal government has suddenly become sensitive to its people?
I ask these questions not because I want to scare people away from riches. I am only saying; let us not develop a tendency of expropriating wealth. Let us create wealth. Historical injustices are not made right by just multiplying the people that eat the cake but by multiplying the cake and the people who eat it.
If ZANU PF is serious about black empowerment I challenge it to walk the talk and begin by accepting that most of the damage to black entrepreneurship in the past 30 years was due to its bad governance and impunity. After that we share its proceeds of corruption and plunder before we demand the 51% from foreigners!
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