Indigenisation Gets Thumbs Down – survey

Indigenisation model given thumbs down

The Zimbabwe Standard

October 14, 2012

ZIMBABWEANS are against the taking over of companies under the government’s indigenisation and empowerment programme, which has frightened away potential investors, a recent survey has established.

Report by Moses Chibaya

The programme is being spearheaded by Youth Development, Indigenisation and Empowerment minister Saviour Kasukuwere.

According to a recent survey by Afrobarometer, a research project that measures public attitudes on economic, political, and social matters in sub-Saharan Africa, the majority of Zimbabweans preferred an empowerment programme that created employment as opposed to grabbing shares in foreign-owned companies.

The survey, which was co-ordinated by the Mass Public Opinion Institute (MPOI) in the country, also measures public attitudes on democracy, evaluates quality of governance and economic performance.

According to the survey, more than 78% of the respondents preferred the creation of jobs, as a way of empowering them, as opposed to taking over shares in foreign-owned companies.

“More than three quarters (78%) of respondents agree with this approach, either ‘strongly’ (24%) or ‘very strongly’ (54%),” read a statement released by MPOI. “Zimbabweans therefore robustly endorse the empowerment-via job creation model. Taking over companies has very mild support with only two in 10 (19%) of citizens in support for this approach.”

At least 2 400 adult Zimbabweans were interviewed in the survey.

MPOI added that this policy preference got strong endorsement across provinces, gender, age and all education groups.

However, support for job creation consistently declined with age from 82% among the youth (18-30) to 78% among the middle aged (31-45).

It further went down to 76% for the 46-60 age group and dipped to 72% among senior citizens aged 61 plus.

“Support for indigenisation runs in the opposite direction ie, in other words, it increases with age from 15% among the youth to 23% for those aged above 60 years old,” said the survey.

The coalition government has been plagued by apparent policy inconsistency, particularly over how to apply the indigenisation law, a move which has only served to deter much-needed investment inflows.

The indigenisation law, which was enacted in 2007, requires all foreign-owned companies to hand over a majority stake of 51% to local blacks.

However, unlike Zanu PF, the two MDC formations are in favour of an empowerment model based on employment creation.

Both Finance minister Tendai Biti and Reserve Bank of Zimbabwe governor Gideon Gono, have registered their opposition to the laws affecting banks, saying the move would hurt the already fragile economy.

The regulations also target the tourism sector, safari and cruise yacht operators.

Kasukuwere causes consternation

Kasukuwere has caused a great deal of consternation in the international investment community seeking to invest in the country as the policy has already taken its toll in the mining sector. The indigenisation policy is now set to be applied to all foreign-owned banks.