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(HERALD) Biti differs on indigenisation

Biti differs on indigenisation
Tuesday, 24 April 2012 00:00
Business Reporter

FINANCE Minister Tendai Biti has blasted Government’s indigenisation and empowerment programme as a policy designed to benefit a few elite, contradicting his utterances only a month ago. Minister Biti last month told the second Euromoney

Conferences meeting in Harare that indigenisation was critical for democratisation of the economy to avoid conflicts caused by exclusionist policies. Speaking at the Atlantic Centre, a think tank in the United States, Minister Biti attacked the policy, suggesting it should be reviewed and modified.

Government has insisted indigenisation was designed to bring previously marginalised blacks into the mainstream economy.

Under the indigenisation drive, foreign-owned companies are required to sell a controlling 51 percent stake to locals or indigenous State institutions.

Minister Biti roundly condemned indigenisation, saying the transfer for value was ideal, but since the majority is poor, it only benefited a “few rich blacks”.

“The transfer (from foreign companies) is for value, which is good, but in a situation where the majority are poor, you are just transferring shares from a few rich white people to a few rich black people,” said Minister Biti.

He criticised the policy as a poorly thought out initiative, advocating the transfer of foreign assets. He opined that the best approach was to grow the economy.

But Indigenisation Minister Saviour Kasukuwere has often defended the policy as broad-based empowerment to lift the marginalised out of poverty.

He contends sustainable development would only be realised if indigenous people had control of the economy and benefited from their resources.

Minister Biti corroborated this, when he said: “Indigenisation is the democratisation of the economy. It is important that Government expand the national cake as wars have been caused by exclusion. Democratising the economy is not a challenge,” he said.

Inequalities in distribution of resources are major causes of unfortunate fire-related incidents and deaths that occur in Nigeria’s oil-rich Delta region.

This has led Zimbabwe to the drafting of the Indigenisation and Economic Empowerment Act, passed into legislation in 2007 and supported by regulations gazetted in 2010.

Under the legal provisions, the Government embarked on aggressive transfer, for value, of shares from foreign firms. The initiative has gathered momentum in the mining sector and will soon spread to banking.
So far, firms such as Implats’ 87 percent-owned Zimplats and its 50-50 joint venture with Aquarius, Mimosa Mining Company, have agreed to comply.

Minister Biti is also on record as opposing indigenisation of the banking sector, saying it was already largely local, as only four banks were foreign-owned.

He claims the four banks’ US$60 million capitalisation requires US$30 million for a 51 percent stake and the amount was enough to start a local bank.

However, Minister Kasukuwere has repeatedly insisted that the indigenisation and economic empowerment drive would not spare any sector.

This would be done in accordance with recommendations from 13 sectoral committees established to draft implementation modalities of the policy.

The committees also highlighted thresholds and periods appropriate for different sectors. But the responsible minister is empowered to vary them when necessary.

Labels: INDIGENIZATION AND EMPOWERMENT ACT (ZIMBABWE), TENDAI BITI

posted by MrK @ 5:07 PM