18 December 2012

Zimbabwe: Biti Slams Zanu-PF's Indigenisation Policy

press release

Hon Tendai Biti, the MDC Secretary General has said that JUICE is the only sustainable way of getting Zimbabwe back on its feet after decades of plunder and non-development.

Speaking during a public debate with Zanu PF's Saviour Kasukuwere, Hon Biti said Zimbabwe is a very small economy, less than 3% of the entire SADC economy with a mere budget of US$3.8 billion dollars and SADC's third smallest economy.

"The cake is very small. The challenge is how do we expand the cake? The point of departure between Zanu PF and MDC is different. Zanu PF starts from the point of view that we should distribute the small economy, which is a rat to over 14 million people, while the MDC wants to expand the economy, for the nation to have supply side economy, to expand the cake so that the rat may become an elephant and have more economic players than when u have a small population participation," he said.

He added that the fault line was that, with the Zanu PF indigenisation model, one has to have money in order to be empowered since the shares are sold. "Nobody is being given a share for free, one has to buy them. 85% of the people in Zimbabwe live below the poverty datum line, therefore, only a few people can afford to buy these shares. So the Zanu PF model becomes predatory accumulation, from the rich to the rich. It's not empowerment, it is pure elite predatory accumulation" he said.

The MDC's Jobs, Upliftment, Investment Capital and the Environment (JUICE) policy uses a bottom up approach where the party envisages every Zimbabwean as an economic player. "We start with the basic which is a job and Juice therefore is aimed at creating a minimum of at least a million jobs by 2018. Everyone wants a job. A job is a form of psychological comfort apart from facilitating production for oneself" he said

He added that the basis of the Indigenisation Act is acquisition of 51% of the shares by Zimbabweans. The Act does not have Community Share Schemes - these came as an afterthought as a veneer to give some kind of legitimacy to a legal process that was predatory and elitist. Community share trusts do not have legal existence vis a vis the Indigenisation and Empowerment act.

He said, it therefore, does not justify why a company should part with money for the community share schemes. "On what legal basis are companies being made to part with US$10 million or 15? There is nowhere in the indigenisation and Empowerment act that compels companies to donate money to a community share scheme or to any farm. What you are actually seeing is cohesion as companies are being forced to part away with the money. Now, even assuming they are giving that voluntarily, to the extent that there is no company in Zimbabwe that I know of which has parted with 51% of its shareholding. Actually, we are having the anomalous situation where companies are bribing themselves out of the compliance of the act by paying a mere US$ 10 million," he said.

The way it is being implemented is very opaque. No one knows the circumstances that those companies are parting with the said money.

He said the potential of this nation is huge. This country has the potential of being the second largest economy but Zanu PF does not have the honesty and craft competence of growing this economy which is why the MDC has come up with JUICE.

"JUICE says lets have Foreign Direct Investment which is a direct contradiction with Zanu PF's policy because no sane person out there will come and invest his money in Zimbabwe when 51% is already gone, it doesn't happen," Hon Biti said.

"Zimbabwe got US$380 million investment in 2011, Zambia got US$2.8 billion while Mozambique got, outside of mining sector, US$2.9 billion and in the mining sector, in Tete province alone, because they do not have indigenisation, they got 7 billion from 2 Brazilian companies in the same year of 2011. What makes investors invest in these countries? It is because we have got extractive, predatory economics which you will not find in Mozambique or Zambia," he said.

Hon Tendai Biti said mining is much more than diamond adding that if mining is handled well, it will be contributing as much as US$14 billion dollars by 2018, with the modest contribution of mining to GDP from 8 percent to about 40 percent in the same year.

"For this to happen, we should put money into exploration and creation forward linkages i.e. the issue of procurement for the mining sector domestically. We require creation of backward linkages which require the issue of beneficiation and value addition," he said.

He said there is need for an accumulation model based on beneficiation and value addition as opposed to an extraction model. He said Zanu PF is the last party to talk of corruption and as the party went to sleep since 1980 when it should have done something to replace the infrastructure in different sectors.

He said US$14 billion dollars is needed to deal with infrastructure such as in electricity, water, roads and ICTs. To deal with industries that are collapsing right now, for instance, with Bulawayo turning into a museum, the country needs US$5 billion to resuscitate industry.

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