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Oliver Kazunga Senior Business Reporter
Bulawayo-based emerging entrepreneur, Michael Nelson, is reaping the benefits of the government’s Indigenisation and Economic Empowerment programme after receiving a lump-sum payment that he invested in the retail business.Nelson is a former British American Tobacco (BAT) Zimbabwe sales representative who acquired shares though the company’s Employee Share Ownership Scheme or Trust.
(ESOS/T) is a defined contribution plan that provides a company’s workers an ownership interest in the company.
Through the trust, employees of a company, or group of companies, are given a chance to participate in or receive profits arising from the acquisition, holding, management or disposal of the stock, shares or debentures of the company or group of companies concerned.
The shares given to the employee are held in a trust until the employee retires.
Upon his resignation in October last year Nelson walked away with a whooping $98,000 after disposing his shares part of which he has used to set up a new business.
So far, Nelson has used $30,000 to invest in the fast moving consumer goods business after opening a supermarket, fruit and vegetable outlet in Bulawayo’s Southwold suburb as well as operating a takeaway restaurant and another supermarket called HI-City in Nkulumane.
From his business units, Nelson presently employs eight workers and is looking forward to hiring more workers as his business expands.
“I decided to resign from formal employment in October last year after serving BAT for 18 years. Upon resignation, I benefited from the ESOT where my shares in the trust were disposed generating $98,000,” said Nelson.
“I have since invested $30,000 in the retail sector by opening two supermarkets in Southwold and Nkulumane. I also opened a fruit and vegetable outlet and a takeaway. I am looking forward to expanding my operations going forward. For example, I have already bought an oven for baking bread and buns. We have started baking and the takeaway in Nkulumane is operational.”
To add to his business Nelson has also applied for a farm in Umguza District as he intends to venture into fresh farm produce. He plans to grow potatoes, cabbages and tomatoes, among others.
The former BAT employee also used the proceeds from the ESOT to purchase two vehicles for his business and a house in Morningside.
Hi-City Enterprises recently acquired several hi-tech industrial refrigerators from South Africa, in an effort to boost its operations. This is in line with Nelson’s vision to set up a leading chain of supermarkets across Bulawayo.
He said he was working to strategically position his enterprises by looking at business opportunities that exist in Bulawayo although the city was experiencing massive de-industrialisation.
“At the moment, my rate of turnover is low but I will work hard to strategically position my operations going forward,” he said.
The ESOT is in line with the government’s Indigenisation and Economic Empowerment Programme launched a few years ago.
The programme was launched by government to address colonial imbalances in terms of ownership of economic resources that existed even after the attainment of Zimbabwe’s Independence in 1980.
During the colonial era in the then Rhodesia, workers would receive pitiful amount, a radio set, bicycle or a wristwatch upon retirement. This literally showed that they would have nothing meaningful to show for their loyalty, hard work or many years in service apart from the little remuneration and negligible benefits.
This is despite the fact that an employee is the most important resource in any organisation. However, the government now recognises that employees are the driving force behind companies.
In an effort to bolster empowerment initiatives of workers, the government made a provision within the Indigenisation and Economic Empowerment Act that ensures that all shareholding arrangements should cater for the employee’s welfare.
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