Zimbabwe's indigenisation programme impossible - Eddie Cross

Zimbabwe's indigenisation programme impossible - Eddie Cross
Published: 28 February 2012 (12592 Views)
BULAWAYO - Economist Eddie Cross says implementing the indigenisation programme in Zimbabwe will be impossible as most people do not have resources to acquire the reserved 51 percent stakes.

"Everyone supports the indigenisation law but it is not possible to implement it because the truth is most people in the country cannot afford to buy the 51 percent shares of any company," Cross said in Bulawayo during a business round table.

"Most people do not have funds to buy the reserved shares as they were languishing in abject poverty," he said.

The government enacted the controversial indigenisation law that compels foreign owned firms to transfer a controlling shareholding to locals, but did not set a ceiling on the maximum shares which should be ceded to Zimbabweans under various schemes including employment share scheme, community shares trusts and public share offerings.

The law has however been criticised as an impediment in attracting much needed foreign direct investment.

The African Development Bank recently warned that the indigenisation law would put a further damper on investment in the country particularly in the mining sector.

European Union (Eu) ambassador to Zimbabwe Aldo Dell' Ariccia echoed the same sentiments recently and added that the indeginisation process in Zimbabwe should not be tantamount to theft where prospective partners just grab the shares without contributing anything.

Ariccia said the indigenisation process was an emerging trend in some countries but highlighted people who wish to be shareholders of any company should genuinely buy the shares. "The indenisation should not about takeover of companies.

It's not about taking the 51 percent shares and say they are mine. Proper empowerment process should be a combined a participation in the function of the company which you want to indigenise," he said.

Economist Eric Bloch has also criticised the law saying it will result in foreign investors becoming minority shareholders in their local investments.

However the Indigenisation Minister Saviour Kasukuwere is on record saying the indenisation policy was irreversible and there to stay.,

Kasukuwere says the law seeks to economically empower the previously disadvantaged people in the country.

The minister argues that many people in the country were embracing the law which he says can be a panacea to reducing poverty in the country.

- Daily News

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