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(STICKY) (SUNDAY MAIL) Indigenisation: The full story

Indigenisation: The full story
Sunday, 14 October 2012 01:35

“It’s not just about targeting these British and American companies, it’s also a focused response to the atti­tude and behaviour of these Western companies,” the Minister of Youth Development, Indigenisation and Economic Empowerment, Cde Sav­ior Kasukuwere (SK), vowed as he artic­ulated the Government’s policy on Indigenisation and Economic Empowerment. In this interview with our Assistant Editor Munyaradzi Huni (MH), the minister went on to respond to allegations that he could be enriching himself as he imple­ments the policy.

MH: As one of the young ministers in the inclusive Government, how would you describe your working relations with your colleagues from the two MDC formations?

SK: Very interesting, quite interesting really. You see, some of the colleagues from the two MDC have an identity crisis in terms of what they believe in and what they should do for the country. Their identity crisis arises from their failure to resonate with their nation’s best inter­est.

MH: Why do you think they behave like this?

SK: I think it’s the DNA of the organisation. It’s the genetic make-up of their party. They can’t stand on a point of principle. Some of them you can see that they know how to exe­cute their responsibilities, but ordinarily in the majority of instances, they defeat the patriotic commitment to moving the country forward.

You only need to look at the MDC-T’s recently half-launched JUICE Policy which they claim is an alternative to indigenisation. You will note that this policy actually struggles to be different from indigenisation because it is drafted by people who in private had actually agreed with us on critical matters of indigeni­sation, only to now seek to contest them for the sake of partisan political interests, for the sake of pleasing interests outside of their majority people’s interests.

I will give an example. In JUICE the MDC-T says it will also have a Sovereign Wealth Fund founded upon the wealth of Zimbabwe’s natu­ral resources, which is a fine acknowledgment of the aspiration of our Government’s indigeni­sation programme. However, they then become like chameleons playing to the colour of foreign interests when they begin to say the establishment of such Sovereign Wealth Fund must be determined only after consultation with foreign investors. How can you consult the same people from whom you are demand­ing an equitable share of your natural resources on how to use those resources? How will our nation and its people’s interests be guaranteed then?

MH: Minister, you will agree the majority, if not all of these MDC ministers, are new in Government. This is their first time to come face-to-face with Government work, do you think they got proper orienta­tion on how to tackle issues in Government because some of them still act like they are an opposition party outside Government?

SK: The point is one has to simply have that desire and love to serve Zimbabwe’s interest, which today is economic. No matter their being new or not, it is a desire you do not need to teach anyone.
Proper orientation on administrative and diplomatic matters once in government for the first time is not possible if there is no willing­ness to learn. To prioritise the national interest one must serve once in that position of service and authority. There has to be willingness to learn how to serve our nation’s interest, and I don't see that. There is no willingness to learn. Some enjoy travelling than being here at home serving the people.

MH: Turning to you, how has it been, lead­ing this crucial ministry at this time?

SK: It has not been easy, but the challenges have been worth it because it’s important that we address the issue of an ownership structure that has for too long been skewed against the majority of our people. We also need to lay the foundation for a stronger and more inclusive economy. There is no better time to do this than now.

MH: Minister, can you explain in simple terms what exactly you are trying to achieve through indigenisation. What exactly is this policy all about?

SK: Indigenisation is a continuation of the fight that was started way back by our ances­tors and our leaders. From Mbuya Nehanda to President Mugabe, it’s about the people of Zim­babwe, resisting subjugation, resisting being under other people in terms of the con­trol of their own economy. It’s about ourselves stand­ing up, self-determination, being the ones who decide our own destiny as Zimbabweans. We have achieved political independence. It was painful, but was achieved in 1980. We have gone on to score huge successes in education.

We produced good teachers who went on to expand education in the country. And through this education policy we created the human resources second to none, the capacity to say yes thanks to political independence we are now capacitated, but now we need to use that human capacity to master economic resources, to harness our national wealth for our own benefit as a people.

MH: Minister, some youths out there are saying indigenisation is fine, but that’s a long-term solution. For now they say they want jobs.

SK: Who will create the jobs? We are talking about the seed. The one who will create the job, the entrepreneur. This is the whole idea behind indigenisation. Domesticating our economy, broadening the ownership of our economy, creating a middle class amongst our people, making sure that Zimbabweans are the driving force behind their economy. Jobs will only be created if we have people who create jobs using the national resources available. Those jobs are made more secure when they are founded on our own entrepreneurship and harnessing of our own resources. Why do you think we lost so many jobs after sanctions were declared against us? It was because the jobs had been cre­ated by Western companies that simply closed shop and left us without a livelihood after they were commanded to do so by their countries. American jobs are created by Amer­icans, Chi­nese jobs are created by the Chinese and hence they are today’s big economies. You will also notice that the rising economies where jobs are more secure are those with a strong sense of “we”, and no foreigners will do it. Look at Brazil, Russia, India, China they invite foreign investment only to partner with them without giving up their national inheritance.

MH: Some youths are arguing that they are losing jobs now because companies are clos­ing due to uncertainty created by indi­genisation, the 51 percent local and 49 per­cent foreign ownership structure.

SK: Ahh, come on, Munya! Let me give you examples of companies that have responded to indigenisation and set up shop in Zimbabwe. Look at Pick ’n Pay, it has come to invest in Zimbabwe under the 51 and 49 policy. Look at Ecobank, it has also come under the 51 and 49 percent arrangement and has created more jobs. We have Chinese companies that are buy­ing tobacco in this country, they have come under the same climate. I can give you a num­ber of other companies that have come to invest in Zimbabwe fully aware of the indigeni­sation policy, and not one company has been closed in Zimbabwe because of indigenisation.

The former American Ambassador to Zim­babwe, Charles Ray, spoke about it and said this is not new. These laws are all over the world and all you need to do is to tell us that this is the law of the land and we will go by it and we will tell our companies to come and invest.

MH: Minister, from what you have seen so far, do Zimbabweans have the appetite for indigenisation?

SK: Amazing appetite. Maybe we are actu­ally failing them. We are not doing enough. Look at the gold sector, how many Zimbab­weans now are looking for gold across the country, be it panning or whatever? In fact, we need to look at laws that prohibit the develop­ment of small-scale miners. Can anyone boldly claim that our people do not want better lives, to be able to enjoy the fruits of labouring their own natural resources? In the past our people were made to fear laying claim to their own national wealth by a brutal colonial system and its laws and policies. We have noticed that we have about 144 pieces of legislation which are against Zimbabweans. So the areas that have to be attended to in terms of the aspirations of our people are vast, and indigenisation is too big to fail.

MH: Don't you think it's the way you have packaged and presented the indigenisation policy that sometimes scares investors?

SK: There is too much politics, which can­not be blamed on me or Zanu-PF. The politics have been about dividing us and then bringing an end to the pursuit of our aspirations. And they have used fear, doubt and uncertainty to do so. To the contrary, the biggest challenge facing investment in Zimbabwe is Zidera, whose pro­visions state that American directors at institu­tions like IMF and the World Bank should vote against Zimbabwe under any cir­cumstances.

But fortunately for us, the Russians were here just this past week, the Chinese are here, the Indians are coming, so are the Brazilians, while South Koreans are showing great interest — these can come because they have no obli­gation to vote against Zimbabwe, they are not offended by sitting down at the dinner table with a people claiming a share to their own national wealth. Zimbabwe is open for busi­ness and investors should know this. The investment climate you find here is almost the same as you find anywhere in the world where the aspirations of the local people must be paramount, where the indigenous peo­ple par­ticipate in their economy.

MH: But some people are saying you seem to be targeting American and British compa­nies in your indigenisation drive while leav­ing the Chinese and the Indian companies. What is your comment?

SK: That’s not true. The Americans and British have only shot themselves in the foot really. They are the ones that left Zimbabwe in droves when they declared sanctions because we as people wanted a share in our national economy. We did not chase them away. And now they cry and say they are being targeted, they are only pained that others are now com­ing to Zimbabwe to eat from the honey yavakaramwa vega simply because takati tipeiwo chidimbu chehuchi hwenyuchi dzedu. Come on, let’s not promote double standards. Remember tit for tat is a fair game.

Yes we must be glad and welcome the Chi­nese and Indians because they are not against us. They are not opposed to the aspirations of the people of Zimbabwe and they don’t intend to plunder our country.

MH: There is talk that indigenisation and economic empowerment seems to be hap­pening only in the media but there is nothing on the ground to show for it.

SK: You see that’s the point. While we are busy implementing and changing our people’s lives others are being distracted by the media. When they finally wake up and see a changed indigenous economy from Beitbridge to Nyamapanda they will again cry, takasiyiwa. Kasi maiva mumapepaka, muchituka, iyo Zim­babwe ichifamba neindigenisation and empow­erment chete.

MH: Minister, is it possible to quantify the members who have benefited from these policies?

SK: Yes. I will give you just an example. Over 4000 youths have directly benefited after they ventured into income-generating projects, very viable projects. We are receiving tremendous support from IBDC, CBZ, Stanbic as well as CABS. We have started revamping the produc­tion of potatoes in Nyanga. We poured in almost half a million dollars there. You must go to Nyanga and see the hive of activities there. And did you know that seed potato farming for the entire country was reserved only for a few designated growers in Nyanga who were white? We have also distributed some of the funds as a ministry and managed to create an enabling environment at most of our financial institutions which are now lend­ing more favourably to first timers, young peo­ple who are venturing into business. We have spoken about the community shareholding schemes. If I were to quantify the millions of dollars that we have got, I can say it's close to a billion dol­lars that has now been localised. Blanket Mine has announced that they made the best per­formance since 1906, but 51 percent of that company is now in the hands of indige­nous people. Now if the company has made this huge profit, 51 percent of it is going to remain in Zimbabwe.

More so our idea is now to put the localised assets from these mining companies on the stock market so that there is more broad-based participation. These are some of the assets I was saying are in the hands of Zimbabweans. Just imagine if 10 percent of Old Mutual is now in the hands of workers, what does that amount to? The same goes for BAT. Just recently we approved the BAT empowerment plan where almost $40 million is going into the hands of workers while another amount goes into a trust which will be chan­nelled towards assisting youths in tobacco farming, rehabilita­tion of some of the infra­structure and training of some of the young people. These are some of the empowerment transactions. Across the country we have now set up over 59 commu­nity trusts and most of them are ticking and are beginning to facilitate development and empowerment. They are benefiting from the shareholding obtained out of the exploitation of resources in their areas. We will be launch­ing community trusts in Hwange, the same as Masvingo, Chiredzi area, the areas of Bikita, areas in Midlands, Zvisha­vane and Shurugwi. Community share trust funds are run in the interest of the community by the chiefs, a rep­resentative from the local authority, board members with a legal and accounting back­ground and a representative from the partici­pating company to ensure transparency.

MH: Talking about the community share trust. Explain to us how areas in the country that do not have these resources like miner­als are going to benefit?

SK: We have put in place three structures. If you look at our statutory instrument of March 2010 we have designated entities such as the employee/workers trusts, the national indi­genisation and empowerment fund, our sover­eign fund which is administered by the NEEB board. This NIEEB board has a duty of equal­ising development around the country. It will identify those areas without direct access and benefit from local resources and ensure that revenue from resources from around the coun­try also ensures development in these areas. I have given you for an example that Blanket Mine has given 10 percent to the immediate com­munity, but 16 percent is now a national fund. We are going to use this fund to equalise devel­opment across the country. We must ensure that, for example, the people of Chipinge enjoy the gold that has been mined in Matabeleland South; the ngoda from Chiman­imani must also be enjoyed by people in Hurungwe; the platinum coming out of Mashonaland West province, the people of Marange must also feel it. The same with those in Nyanga where young people are pro­ducing potatoes. The national fund will answer the pertinent question that you have raised.

MH: What is the criteria that one should follow to access these funds?

SK: I will talk about the three facilities that we have. We have a Ministry of Youth facility, which is out of our small budget that we have been working with the Commercial Bank of Zimbabwe. The forms are available at the Commercial Bank of Zimbabwe and some of them are available throughout the country at our district offices. Secondly, we have the CABS facility, the forms are available in our ministry and also across the country at all CABS branches, this is the Youth Fund. And third is the Stanbic facility, forms are available at the bank's branches basically targeting the youths. If young people go to these institutions, they will get the forms. Where they need help, my ministry will always come in to support young people in terms of putting their project proposals together. We also have the Zim­babwe Youth Council which is co-ordinating part of the work alongside my ministry and CABS in terms of explaining, educating and carrying out seminars across the country teaching young people about the exact require­ments so that they don't write endless projects that don't get a response. Those young people who have also written their project proposals and have not been successful, we have said those applications must not be discarded but all the applicants must be taken through a training programme so that they have a better appreciation of what is required of them.

MH: Am asking this question because some people think for them to access the funds, you, as minister or as a ministry, have to approve the projects.

SK: No, no, some people say its politicised. They say you need a Zanu-PF card to go to CABS, but CABS is not a member of our party. This is a national fund and we want our young people across the political divide to benefit.

MH: So you can confirm that some youths from other political parties have benefited?

SK: How can I stop them? We have created statutes that young people of Zimbabwe should benefit and why then should I block one per­son because that person does not belong to my political party? Actually I can only wish more young people from whatever political back­ground who have entrepreneur­ial skills are organising themselves to quickly take these opportunities. Their skills, whatever party one belongs to, will improve the economy of Zim­babwe, an economy which me, you and them must all feed from.

Do you know that the youths in MDC have a resolution that they will benefit from indi­genisation and economic empowerment? You see the leaders in MDC are already benefiting themselves, but they want everyone else to remain outside the empowerment project because it helps them to have an audience they can abuse for their personal purposes and political ambitions they will privately benefit from what they publicly call a Zanu-PF thing. The sad thing is, publicly they deprive others who are their supporters.

MH: Minister, the issue of 51 percent local shareholding and 49 percent foreign share­holding, how exactly did you come up with these figures?

SK: There is a law that stipulates that. It's not a personal law, this is not a Kasukuwere law. It was not by decree, by the way. There is a process that was started in Government, con­sultations were undertaken with all the busi­ness bodies, CZI, AAG, IBDC, this was around 2005 when the process started. In 2007, the bill was passed by Parliament, in 2008 the Presi­dent signed it into law. We implemented it in 2009 and 2010. In 2009 we set up a board and in March 2010 we came up with a statutory instrument that gave effect to the law. This is what is in the Act which is very clear on Chap­ter 14 (33) of our law, which speaks to the issue of 51 and 49 percent.

MH: You said in terms of indigenisation you started with the mining sector, how far have you gone in indigenising this sector?

SK: We are very comfortable and very satis­fied with what has happened in the mining sec­tor. We have got compliance almost across the board...I am sure we are going to announce to the nation very soon on the con­clusion, in the entire mining sector that we have com­pleted. There are one or two mining companies which have been playing some funny little games trying to delay complying with their inevitable obligation. We have the Raintree Rio deal which has come out not in the way we expected. Secondly we had a chal­lenge with a company in Gwanda, Vubachikwe Mine, which is part of the Duration Group, and also New Dawn with Ian Sanders coming up with various schemes. Today he is in the High Court trying to sell these shares, this merger, de-merger here, but we are containing all that.

We have the capacity now. We have created greater capacity within the board, which was under-funded and remains under-funded, but we have found ways of going by our work.

MH: This is in regard to the mining sector, what progress have you made in other sec­tors, like the banking sector?

SK: In the banking sector we had lots of dis­tractions, but we still have room to move in this financial services sector. In Old Mutual lots of distraction. We have really made headway, we have received plans from Barclays Bank, from Stanbic Bank and we have okayed some of their plans. Already we have the initial phase where they have agreed that they are going to empower the workers, 10 percent sharehold­ing for the workers, which will go a long way in making our work easier. That was kind of being stalled by some elements who continue encouraging the foreigners to say “don’t worry, just delay because this thing will die away”. But how will it die away when this programme is a national programme, feeding from our peo­ple’s aspirations and guaranteeing our national eco­nomic interest?

MH: Minister, let’s not be vague here. Who are these elements that are throwing span­ners in the works? Let’s be open.

SK: I am talking of the financial services sec­tor. The Ministry of Finance, its attitude has been unfavourable to the empowerment of our people in the sector. Look at what they are now going through with the same banks that they were defending yesterday. They have failed to raise US$15 million. They are embar­rassed. They have got egg on their faces. We told them that these institutions are opposed to anything that they want to do, anything that is for the interest of Zimbabwe and Zimbab­weans. Their faces are red today. What have these foreign banks done? They have basically said, you know what, we are not interested. How do you set out to raise just 15 million on a market that is sitting on billions of local peo­ple’s funds with a paper coming from Govern­ment, coming from the central bank and only indigenous banks do respond and the foreign­ers don’t do anything about it? What attitude is this? They are insulting the authorities who have for a long time been standing for them.

By the way, the point about the financial services sector has not been about ownership, I must stress. It's not just about ownership that worries us. It’s the attitude. The imposition of economic sanctions in our own country. These banks we are talking about are sitting on deposits from our own Zimbabweans, yet they deny even the Ministry of Finance and the cen­tral bank the right to raise just 15 million, just 15 million, which I can ask the community trusts in Shurugwi and Ngezi to give them tomorrow. If the ministry and the central bank can’t get the money, they should just come to me because these banks are telling them other­wise.

MH: So, besides mining and banking, what is going to be your approach in the other sec­tors?

SK: We have 14 sectors all in all. We have since published regulations covering all these other sectors of the economy. Overall, there has been good compliance from the manufac­turing sector just as an example...Many com­panies have applied and we have since approved their plans. The key players, remem­ber, in the economy is not limited to a few big companies...but our main focus was the mining sector which has a huge bearing on the economy. We had to ensure it starts benefiting our people. Other sectors we have allowed them over a five-year period to indigenise. You saw us indigenise Schweppes Company, you have seen some compliance in the energy sec­tor, the BPs of this world, we have been having problems with Engen, which has been trying to come through the back door and not being very sincere with its intentions.

MH: Minister, still on the energy sector, you have interests in the energy sector, as you own a company in that sector. Won’t there be a conflict of interest in implementing indi­genisation in that sector? How are you going to handle that?

SK: My job is very simple. My job is to indi­genise the economy. ComOil is already indi­genised, how can there be any conflict of inter­est? I can safely say I am an indigenous entre­preneur who through my own enterprise set up ComOil. What I don’t do is to make myself a shareholder in these companies that I am indigenising because that is where conflict of interest will come in. That’s why I have been very clear that any Zimbabwean is free to par­ticipate in the economy as long as the plan you bring to us is in keeping with the law . . . The construction sector, we have got our good Mayor Masunda with Sisk, this is empower­ment. We have PPC, you have people like Stern­ford Moyo and others buying into PPC. We have not discriminated against any­body because of their perceived political affili­ation, no.

MH: Yes, I was going to ask you, Minister, there is a genuine fear out there that there is a likelihood that someone who has benefited in mining will benefit in tourism and will benefit in manufacturing. How are you going to guard against that?

SK: We have a very competent board and I am making sure we don’t see the same charac­ters replicating themselves in almost every sec­tor of the economy. Some of the transactions that are troubling it’s because certain elements, certain characters, have already participated in certain sectors of the economy. Remember some among our countrymen and women are very greedy. There is this element of greed, they want to be everywhere, but we have tried hard as a ministry to ensure that this pol­icy is not abused.

MH: We have spoken at length, Minister, but I still don’t really get it how my father deep down in the rural areas will benefit from all this?

SK: We have spoken about the national fund. One of the things that we are now pro­cessing is to set up the stock market which will allow even the tobacco farmer, the individual farmer, to buy into the platinum shares. Once they buy their platinum shares, you can almost tell that the platinum profits this year are going to rise. This is going to be one of the ways our own people are going to accumulate wealth, how they can also obtain tradable instruments that they can say I am participating in plat­inum and here is my share certificate, and from the platinum dividend I want to buy seed maize whose profit I will again use to buy more seed. We are creating security for individuals to make them bankable. The stock market will allow the broad-based participation, the shares must go to as wide the population as possible. You don’t allow one individual to accumulate everything.

Also the profits that are coming from the NEEB board must be used for the general upliftment and development of our country. We have already assisted the Kuyedza Women’s Club owned by the police. We have set aside about two million to capacitate those women so that they can start using their skills. They are all over the country, what can they produce so that they get involved in the economy? We believe that through this programme, as we roll it out, we are going to start affecting people in a positive way, even your old man wherever he is. So please advise your father to keep watch and be ready, help him know of these opportuni­ties, we all should.

This is assuming that the community that he is, there are no benefits arising from the min­ing resources in terms of schools, road con­struction, irrigation development.

MH: Minister, is indigenisation not only a Zanu-PF campaign strategy?
SK: Let me answer it in two parts. First, there is a law that was passed by Parliament. A law which is very clear in terms of empowering the people of Zimbabwe, from all walks of life. Sec­ond, it can’t be denied that Zanu-PF has always sought to see the people of Zimbabwe in better circumstances. So is it wrong that the idea, its conception, its birth came from this party called Zanu-PF, but only to be imple­mented for the entire people of Zimbabwe? That is the way of pursuing a national interest, you take all the people on board after building the vehicle for them to get somewhere, do you leave behind a prodigal countryman when they come before you to enjoy the fruits of their birthright? No. Zanu-PF is a party that has always pioneered ideas that bring about liberation, emancipa­tion, and development to the people of this country.

MH: There is so much money involved as you implement these policies. Minister, how do you respond to allegations that you could be enriching yourself in the process?

SK: Remember, by the time I came to this ministry, I had already built my own business. I am not one of those who walked here without a house. So if it’s a question of me having built my own life, I had done that already. There is nothing to take here. We are empowering the people of Zimbabwe. The mission given to me by the President is very clear and I serve in this Government because of President Mugabe. He trusted me and I must live up to expectations. I must be honest, I must be trustworthy and I should be open to scrutiny.

MH: With these policies in place, where do you see Zimbabwe in, say, five to 10 years from now?

SK: It’s going to be a Zimbabwe that will be bustling with rich miners, very rich tobacco farmers, well-off Zimbabweans who are proud to be Zimbabweans. It will be the envy of the region and the world. Zimbabwe shall start the next “economic tigers”, we shall be the impetus to the establishment of the “Africa Leopards, or Lions”, like the Asian Tigers whose economies define the world economy today. Watch us.

Labels: INDIGENIZATION AND EMPOWERMENT ACT (ZIMBABWE), INTERVIEW, MUNYARADZI HUNI, SAVIOUR KASUKUWERE

posted by MrK @ 11:40 PM