HARARE - President Robert Mugabe yesterday ruled out a one-size-fits-all indigenisation approach, saying only companies utilising the country’s natural resources will be required to immediately turn over majority stakes to indigenous Zimbabweans.
Mugabe told a capacity crowd of 60 000 at the National Sports Stadium that there has been some confusion on how indigenisation should be implemented.
He made a departure from the brash and aggressive style pushed by former Indigenisation minister Savior Kasukuwere.
Mugabe’s statements yesterday, seemed to resonate with retired Reserve Bank of Zimbabwe governor Gideon Gono who has been vocal in his opposition to a “one-size-fits-all” approach to the indigenisation programme.
During his tenure‚ Kasukuwere pushed through an aggressive drive to take over the controlling stakes in foreign-owned companies and hand them over to indigenous Zimbabweans, but his successor Francis Nhema, like Gono, ruled out “one-size-fits-all” policy.
Nhema and Gono seem to have prevailed over Mugabe to soften his stance.
“In the implementation of the indigenisation programme, there has been some confusion,” Mugabe said during celebrations marking 34 years of independence from colonial rule.
“We have said where the companies have been established mainly on the basis of natural resources, mining, agriculture, manufacturing, we demand that Zimbabwe either through government or through our people should have 51 percent and not less than 51 percent.
“But if a company establishes itself and is getting raw materials from outside and the raw materials are not from here in Zimbabwe, take the case of aluminium, we don’t have raw materials of it; if the raw material comes let’s say from Tanzania, which has it, and the company establishes itself here in Willowvale, we cannot demand 51 percent, we can negotiate with the company on what percent we shall have.
“If a company establishes itself using raw materials sourced from outside the country, we will share.
“We cannot demand 51 percent because we don’t have materials. These materials have come from outside and the machinery is also coming from outside and therefore we don’t have a basis to demand 51 percent.”
Gono and Kasukuwere clashed on how indigenisation should be implemented, but Mugabe seems to have taken counsel from the ex-Central Bank chief, if his remarks are anything to go by.
Kasukuwere had pushed an equity-based model where all foreign owned companies including banks had to cede 51 percent shares to Zimbabweans, but Gono was of the view that the one-size-fits-all was not apt as it threatened foreign direct investment needed to jump start the comatose economy.
Gono proposed a supply-side-employment-focused indigenisation model arguing that unemployment was the biggest threat facing the people of Zimbabwe, a position that seems to be supported by the reality on the ground now.
At the time, Gono fought running battles with among others the minister of Information Jonathan Moyo who once labelled him a “house nigger” during the Zimplats $1 billion indigenisation saga which the ex-RBZ governor sought to block arguing that it was fraught with irregularities.
In the one-size-fits-all argument, Kasukuwere insisted that no sector was to be exempted from the 51 percent indigenisation equity and that this was the law while Gono’s supply-side-job-creation sought to ask Government to enact laws that ensured that explicit procurement policies.
These policies would require government departments, parastatals, local authorities and other private sector companies to out-source or procure between 60-70 percent of their needs from indigenous suppliers in return for letting the investors own 100 percent equity in their entities. Government would in turn benefit from corporate taxes on profit rather than dividends which are neither guaranteed nor predictable.
Nhema told a recent two-day indigenisation and empowerment conference that the indigenisation programme would be done gradually.
“If you are going into sections of the service industry like banks, manufacturing and others where there is no resource to begin with then you cannot say the 51 percent is mine,” Nhema said.