Indigenisation stunt poses serious ramifications for Zim

A series of articles have been written about the issue of Indigenisation but what really is indigenisation.  In layman terms, indigenisation refers to the ownership of property by people native to a certain country.  The indigenisation has sparked numerous debates in the country centered on whether it benefits  the ordinary man on the street or whether it is just a mere machination by political fat cats to increase their coffers.   From my own understanding the Indigenisation process may harm the economy in much the same way as the land reform process spiralled the economy out of its bread basket status into a basket case in a matter of a few years.



The face of land reform...

Economists present the argument that the economy is at a critical stage of growth; it will hurt the economy to lose the little investment offered by countries such as South Africa in the form of Impala Platinum (Implats) - which owns 87% of Zimplats practical. It would virtually destroy the country's last remaining chance of staging a worthwhile economic recovery.  The country cannot on it’s own finance recovery and development. The insistence on majority local ownership will reduce the availability of capital while raising its cost. It will mean less investment and slower growth. Another debate, would I as an individual have enough buying power to access shares from such entities.  The ordinary individual in this context needs to be redefined because of the social and political dynamics behind this so called “indigenization”.

Under the Zimbabwe's indigenisation law, from the regulations  first published in February 2010 stipulate that any foreign-owned business with net assets of more than $500,000 must divest 51 per cent of its shares to indigenous Zimbabweans within a five year period. An indigenous Zimbabwean is defined as persons who suffered under colonial-era racial discrimination and their children born after independence in 1980 – which in practice means mainly black Zimbabweans. Those include reneging on contracts previously struck with Implats and grabbing 51% of the assets of all the mining companies operating in the country.