Government’s mixed messages over status of indigenisation regulation

By Violet Gonda
18 February 2010

The latest newsletter from Prime Minister Morgan Tsvangirai says the government ‘dropped’ the controversial indigenisation regulations, following an unprecedented outcry from stakeholders. But conflicting statements have been issued by the rival partners in government, indicating that the regulations have not been dropped.

The Indigenisation and Economic Empowerment regulation which was passed last week, requires businesses to cede a controlling interest of not less than 51% of the shares to ‘indigenous’ Zimbabweans. From March 1st companies have forty five days to disclose their shareholdings or indigenisation plan, and they must fully comply within five years.

The controversial bill was passed through Parliament in 2008 after resistance by MDC legislators, when the former ZANU PF government had a majority in parliament.

On Wednesday, Robert Mugabe defended the regulations at a tourism investment conference in Harare. He said 49% is a lot of equity and it is only the foolish investors who will say no. The Affirmative Action Group has also warned it will go on a campaign to enforce the regulations on companies in urban areas from the beginning of March.

The statement from the Prime Minister’s office also said that the Minister of Economic Planning and Investment, Elton Mangoma and the Minister of Youth Development, Indigenisation and Empowerment, Saviour Kasukuwere, had agreed to go back to the drawing board to revise this legislation. We were not able to reach either minister for comment at the time of broadcast.

The newsletter went on to say: “This is in line with Prime Minister Morgan Tsvangirai’s stated vision for real empowerment, based on providing incentives for all stakeholders to promote growth and create jobs, rather than enriching the elite through asset redistribution. This policy would seek to build on the economic growth and gains of the past twelve months to ensure that the nation’s Zimbabweans want is a real economy, with jobs, growth and food security.”

Last Friday Minister Kasukuwere told SW Radio Africa the regulation will not be reversed but that the government would accept feedback and suggestions to improve it.

But James Maridadi, the Prime Minister’s spokesperson, said on Wednesday the Tsvangirai’s position was that the regulations were ‘counter-productive’ and he maintains he had not been consulted. Maridadi said there is now going to be a debate by the Council of Ministers to discuss this issue. He said Tsvangirai agrees that Zimbabweans should participate in the mainstream economy but that the indigenisation regulations should not scare away investors.

Meanwhile, the Deputy Prime Minister Arthur Mutambara said the Council of Ministers decided last week that there will only be one spokesperson on this subject from now on, because of the mixed messages coming from government.

He said on Thursday: “No one else, Prime Minister or Ministers, no one else is mandated to speak on this matter as per our council decision. So any communications from anyone after Thursday last week you must disregard. The only person speaking on behalf of the government of Zimbabwe in terms of this matter of indigenisation is Minister Kasukuwere.”

Mutambara added: “Disregard the comments from the Prime Minister’s Question Time (newsletter), disregard that.”

The Deputy Prime Minister went on to say colleagues in cabinet had been told to submit their views and changes they want to see through Kasukuwere. He said the Minister was also seeking comments from the private sector.

Observers say there are real fears these regulations will only benefit the elite, especially in a country were there are no credible institutions to ensure genuine empowerment of the ordinary people and when Zimbabwe has such a bad economic track record.