The Trap Of Empowerment?
THE Indigenisation and Empowerment Act is full of loopholes and can be easily be manipulated by politicians for self enrichment, Professor Tony Hawkins said.
Hawkins, a renowned economist, was speaking at a Thompson Reuters Financial and Economic Reporting workshop in the capital this week.
“The legislation is full of holes since government officials and those of influence can
separately negotiate proposals from companies due to selective application of
the law which can lead to self enrichment,” he said.
Government has indicated that the programme will have different thresholds for different
sectors. Analysts fear this approach will encourage corruption as companies
desperately try to comply with the law. Hawkins explained that indigenisation programmes in Nigeria and in South Africa have only enriched an elite few leaving the majority of the
There has been a lot criticism of government’s indigenisation drive which haphazardly implemented given the dire state of the economy. Hawkins indicated that indigenisation programmes that simply redistribute wealth do not empower people unless done fairly and efficiently.
“Nowhere in the world has the programme been successfully implemented without its flaws,” Hawkins added. Governments globally are criticised for failure to put to correct use revenue generated from taxes to empower their respective people. Taxes are supposed to be spent in a way that reduces poverty while raising the standards of living.
Hawkins said that if governments fail to raise the standards of living through revenue from taxes then redistribution of wealth to reduce poverty is more complicated.
“Redistributing wealth be it land or the ownership of shares in businesses , does not empower or reduce poverty, as in the same way there is no guarantee that the taxes we
pay reduce poverty. It empowers and enriches some at the expense of others,” said Hawkins.
Hawkins attacked the proposed community ownership schemes on mining companies for its inequitable distribution of wealth, saying communities with no significant mineral deposits would not benefit from such schemes.
Hawkins further indicated that indigenisation should reduce inequality allied with income and wealth for a more equitable economic growth through encouraging investment.
“The point at issue is whether the people in a country with an 80% poverty headcount, unemployment levels above 60% and one of the lowest living standards in the world would be better or worse off with restrictions on both foreign and domestic investment,” said Hawkins.
The indigenisation legislation has also been widely criticised for contradicting other provisions of the law and for its vague definition of an indigenous person.
Kasukuwere has lately been applying pressure to mining companies to submit their indigenisation plans and left the sector with no strategy to handle the issue amid threats to cancel operating licenses.
By Reginald Sherekete
Opinion Zimbabwe Independent 23 September 2011