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Clifford Shambare
When it comes to this issue, semantics come to the fore in this country. And it seems a good section of Zimbabweans seem to be repulsed by the term “indigenisation”.
However, since “localisation” or “empowerment”virtually mean the same thing, one wonders what would happen if either of these terms were used instead here.
That said, the term “indigenisation” is the one that has been adopted by Government and the public at large over the years. Be that as it may, the actual idea and its consequent practice have been mired in controversy since it was first introduced into the economy in the early 1980s.
Today there are Zimbabweans who support this concept while others are vehemently opposed to it. As is the case with most aspects of Zimbabwean life, this situation is further complicated by the race element embedded in the country and economy.
And because of the presence in the country, of people of Caucasian origin who virtually control the economy today – this race element is proving to be a headache in ways that are not so obvious to the average Zimbabwean.
Although the latter group’s numbers have fallen somewhat over the past two decades or so, it is still very much felt through the share ownership of the country’s businesses, particularly the top companies. And naturally, because of their long standing control of the economy, coupled with their underlying racist mentality, this Caucasian group is opposed to the indigenisation of the economy.
This is an attitude that they have kept under wraps – one which, however, they express occasionally, like the one case in which John Robertson – a former Rhodesian white economist still resident in the country – was being interviewed by a Daily News journalist in December 2013. In this interview, the latter remarked that, “Blacks have been around for a thousand years but had failed to exploit the country’s natural resources”.
As far as investment is concerned, the majority of black Zimbabweans outside the corporate world have so far, appeared not to show much interest in the C-Trade. As a result, we find only a sprinkling of black shareholders, most of them current and retired CEOs, the majority of whom were appointed by white owned companies into these posts just before, or soon after independence, as a way to prevent the nationalisation of their companies – being involved in this activity.
On the other hand, the Caucasians possess quite a few advantages over the former. They share capital among themselves through the social (capital) network; they are linked to international capital. They also possess both technological and managerial skills.
But the majority of black Zimbabweans suffer from a few pertinent negative conditions, these being an inferiority complex, a lack of, or a relatively low level of all the positive qualities that the whites have, as given above.
And above all, their race still lies outside the capitalism realm – a condition that is, however, not of their own design – a condition that a good proportion of them may not even be conscious of in this day and age.
And when it comes to the discussion or acknowledgement of this fact, this latter group is nearly always mum on it for a number reasons. One reason is that they harbour fears of facing this fact, so they do not openly discuss the matter although sometimes they admit it in interesting ways – ways in which they sometimes exhibit the sarcasm underlying their inferiority complex.
“Izvi zvinhu zvechirunguka izvi.” (For these are the white man’s things), they can often be heard remarking.
Sadly, through such thinking, they inadvertently distance themselves from the latter’s economic control realm.
On the other hand, their inferiority complex appears to have subtly led them to associate the term “indigenisation” with inferior things – a mentality they have expressed from time to time. This is the source of the anti-indigenisation mentality that is now deep rooted in the black Zimbabwean economists – most of them black – today. This is the reason why they celebrated the scraping of the indigenisation law by the new dispensation of Emmerson Mnangagwa not so long ago.
However, the latter’s rather confused position on the issue has thrust it into an unviable position (See the “Zimplats seeks clarity on Indigenisation Act”, article on page 4 of this paper’s 11-17 October issue).
The interesting thing here is that this concept was not invented by Robert Mugabe, Zimbabwe’s former president, as is often claimed by those who are against the concept – but by people like Kenneth Kaunda, the first president of Zambia in 1968 (see Oppenheimer and Son).
Interestingly still, when Kaunda enacted this policy, he stipulated the 51/49 percent rule. (That said, I have not been able to establish whether this ratio was his own invention or whether he had copied it from somewhere else, or someone had advised him on the matter).
And as could be expected, Kaunda himself, met with considerable resistance from people like Harry Oppenheimer, the chief of Anglo -American, the majority owner of the Copper Belt mines, at that time.
Be that as it may, like I always maintain, in these matters, everything boils down to capitalism, its ethos, its structure and the character of its sub-systems. And as I have said before, in order to fully understand how the system works, one has to have some idea of its history. So, following this line of reasoning, one finds that – despite globalism – it is still the old economies that drive the modern world economy.
However, one might still ask; how about China? But China has got an economic history that we have not known much about up until now. However, to date, China’s has somehow managed to create a sound base for her economy, that is why she is finding it comparatively easier to catch up with the US, the world’s top economy.
In fact, some American economic analysts fear that today, China could be ahead of the US economically.
Now, come to African economies and you find this (capital) base missing largely because when the colonists were expunged from the continent by the indigenes, they literally uprooted a good part, but not all, of their capital that they had planted on the continent during the colonial period.
The French’s behaviour in West Africa in the 1960s and 70s is a good example in this case.
The South African economy, whose roots are still intact, is an exception here.
This is why that it is currently much stronger than the rest on the black African continent.
What all this means is that in order for the Africans to own any economy at all, they have to literally found their own; this is an imperative that they are currently balking at.
They appear not to have a clue where to start from and how to do it. I can give quite a few examples to back my assertion but let me settle on Zimbabwe here.
In this country, at its beginning, the economy was anchored on British capital through such companies as Anglo-American and Lonrho.
These two companies – that had started off as miners and later, ranchers – had gone on to integrate forwards and sideways into manufacturing and service provision.
Later on, came other companies that depended largely on British capital.
When the Mugabe administration came along in 1980, it tried to have some indigenous people being involved in – at least claiming – a part of the economy.
To that end, it had promulgated legislation that promoted that strategy through such organisations as the Affirmative Action Group (AAG) and the Small Enterprises Development Corporation (SEDCO).
However, the performance of these organisations on the ground even today, still leaves a lot to be desired.
Their major challenge has been their inability – or shall we call it incapacity, and corruption on the part of their leaders. This assertion is backed by the facts on the ground. To begin with, despite having had access to considerable amounts of funding, this lobby has not been able to found any viable manufacturing companies so far.
Secondly, those it acquired from Rhodesian business men have died almost a natural death over the years.
Examples here are Crittal Hope, G&D Shoes, Zeco, Cresta Engineering , among others.
At this juncture, let us consider critically, which factors make a viable economy.
Under most circumstances, at the beginning, one needs to set up a manufacturing system that should be viable in the long run.
This system needs to be backed by a sound financing system. In fact, although the latter should precede the former, these two should evolve in parallel over time.
But one can still argue that some economies such as that of Singapore, have sprung and developed from service provision.
However, without a manufacturing base somewhere to support them, these economies can never really grow. So even though a sound symbiotic relationship eventually develops between a manufacturing/ industrialised economy and a service providing one, without the former the latter can still not survive.
But come to a country such as Zimbabwe, and you find too much emphasis being placed on services, particularly those of marketing and its support systems, ICT being the major one of these. This is an economic strategy that is not sustainable in the long run.
The interesting but disturbing thing is the attitude of Zimbabweans to such a set up.
In this respect, they seem unable to be introspective. As a result, they are often heard alluding to the fact that, “Zimbabwe is the supermarket for the South African economy”.
This is a state in which they seem to be hapless, resigned.
They seem unable to realise that under the current circumstances, most of the country’s major economic challenges – that is, inflation, interest rate hikes, foreign currency shortages, and all – stem from this weakness.
But in the developed and emerging economies, SMEs have always been their strength. Even today where large international corporations rule the roost the world over, no successful economy is without a strong SME component – a component which is still growing in some cases. For example in Germany, the number of small firms has grown from 2,09 million in 2011 to 3,6 million in 2017.
Most of these outfits have less than ten workers (Statista).
In the USA in the same year, there were 58,9 million employees employed by SMEs.
47,5 percent of these had less than 20 workers each ( annual Survey of Entrepreneurs).
In Zimbabwe and other African countries, a good part, if not the whole SME industry, is made up of outfits that have largely remained informal and underdeveloped.
And a close scrutiny of the reason for this state of affairs reveals an interesting but disturbing scenario. To begin with, most if not all African governments, do not seem to fully support their SME sectors.
The reasons for this state of affairs are not clear but one can make an educated guess that these governments are still financially dependent on foreign capital, even for running their own fiscuses.
And so logically, the funder ultimately has a say in the way that the receiver country/government uses those funds.
ESAP programmes are built on this premise.
That said, where this support is available, even from the private sector and sometimes donors, the system is often riddled with corruption originating from the leadership of these organisations.
The overall outcome is poor product quality, unviable operations, unreliable and/or inconsistent supplies and services, and in some cases, final failure of the organisation concerned.
On the other hand, if we look closely into the development paths of those industries that were not funded by the mainstream colonial capital in the Zimbabwe, we find them being developed by individuals, mostly of Caucasian and in a few cases – Asian extraction – who were thrifty, focused, hard-working, and endowed with all the positive characteristics of an entrepreneur.
This implies that in order to succeed, a change of attitude and perception (of these matters), is required of the indigenous Zimbabwean today.
So in conclusion, the way I see it, even thinking of doing away with the concept of indigenisation and its attendant SMEs is a misguided notion, to say the least.
This is because the assumption behind such a notion is that the country’s economy will have to depend one hundred percent on FDI. This of course, is not a desirable state for one to be in.
Shambare is an agriculturist cum economist and is reachable on 0774960937
Bongani Ndlovu