12 December 2012

Zimbabwe: Firms Face Seizure

SAVIOUR Kasukuwere's Youth Development, Indigenisation and Economic Empowerment Ministry will soon embark on company seizures similar to the chaotic farm occupations seen in 2000 as part of ZANU-PF's power retention strategy ahead of next year's make-or-break elections, which the Southern African Development Commu-nity says should be held by June.

The Financial Gazette can exclusively reveal that after narrowly escaping from the jaws of defeat in 2000 by hurriedly expropriating land from the perceived white funders of the Movement for Democratic Change (MDC), ZANU-PF has again set its sights on taking over foreign-owned firms and giving majority ownership in these seized companies to indigenous blacks as a political mobilisation tool.

As fresh polls beckon, the party is leaving no stone unturned as it seeks to maximise on the empowerment drive to get votes in an election in which President Robert Mugabe would, for the third time since 2000, lock horns with his bitter rival, Prime Minister Morgan Tsvangirai.

A Central Committee report tabled at the party's just-ended conference held in Gweru laid down a number of options being explored by ZANU-PF strategists on how broad-based economic empowerment could be achieved.

It is now almost certain that ZANU-PF would increase the empowerment threshold from the current 51 percent as polls draw near.

In its indigenisation status report, the Central Committee, which is the policymaking organ of ZANU-PF, said about 96 percent of all agricultural land in Zimbabwe is now in the hands of locals while local ownership in the energy and power sector was given at 98 percent, even though power-generation and distribution is dominated by State firms.

The banking and finance sector was said to be highly indigenised with 68 percent of Zimbabwe's banks said to be indigenous-owned. The country's 16 asset management companies, except one, were said to be black-owned while 97 percent of the 114 micro-finance/money lenders had been indigenised.

The tourism sector was said to be 56 percent indigenised while the manufacturing sector had an indigenisation ownership of below 50 percent. The mining sector was said to have a considerable foreign shareholding with the biggest mines being 100 percent by foreigners.

Ahead of the elections, ZANU-PF is seen following its 2000 election template whereupon it embarked on a fast track land reform programme after sensing defeat at the hands of a newly formed MDC.

ZANU-PF insiders said a list detailing the companies to be targeted for indigenisation and the empowerment thresholds to be achieved has since been drawn up.

At the Gweru conference, President Mugabe said all companies including those owned by the Chinese would be subject to the requirements of the indigenisation law.

The party's strategists believe that the initiative has potential to appeal to the electorate more than Prime Minister Tsvangirai's Jobs, Upliftment, Investment, Capital and the Environment (JUICE) economic blueprint.

They reason that the party's main wings namely the Women's League and the Youth League should develop plans that fit into the indigenisation programme. The party's supreme decision-making body, the Politburo, will also craft plans on how benefits accruing from the programme would cascade to the common man.

Candidates seeking to represent the party at any level in the forthcoming elections are also being encouraged to developed campaign plans applicable to their communities on how to benefit from assets forcibly taken from their previous owners.

"The indigenisation and empowerment programme has the capacity to appeal to the electorate in a massive way as evidenced by the positive public reaction to the launch of community share ownership schemes, employment share ownership schemes and various youth economic empowerment funds. We, therefore, need to build on this awareness and interest and craft a strategy that will derive political mileage for the party," reads part of the Central Committee report.

"Thus, as we approach the impending election, we have stepped up efforts to implement a political programme of mobilisation anchored on the indigenisation and economic policy. This political programme might have a strong bearing on the success of the party in the forthcoming election."

Lance Mambondiani, a financial markets expert, said a command control implementation of the Indigenisation and Economic Empowerment Act without broad consultative consensus could be the catalyst for another man-made economic tragedy just when the country is showing signs of progress.

"Stakeholders have a legitimate fear that the empowerment law will be spectacularly bungled in similar fashion to the land reform programme, which was by any standard a catastrophic success," he said.

"In its current form, and based on the current policy position, there is no evidence to suggest that the law is any different to the land reform programme or that the outcome will be."

The chaotic land reforms decimated commercial agriculture, the mainstay of the country's economy.

For long, ZANU-PF has resorted to populist policies, dishing out inputs and farming implements as well as directing key parastatals and schools to charge uneconomic fares and fees, leading to their virtual collapse.

State-firms such as the Grain Marketing Board and the National Oil Company of Zimbabwe are some of the companies operating below the red ink due to political interference.

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