Let’s embrace indigenisation

democratise the economy. The Indigenisation and Economic Empowerment Act is not merely a moral initiative designed to redress the wrongs of the past. It serves as both a pragmatic growth strategy that is designed to realise the nation’s full economic potential and a means to strengthen the nation’s democracy.
However, when all is said and done, the success or failure of the Indigenisation programme will depend on the answer to one simple question: Will I, the ordinary Zimbabwean, benefit from Indigenisation?

The short answer is yes. The long answer is that indigenisation will benefit Zimbabweans both directly and indirectly. The three clear ways that an ordinary Zimbabwean can benefit directly include as an investor, employee or a member of a community in which a company operates. The term investor is not reserved for the rich and politically well connected. For the ordinary Zimbabwean the benefits of buying shares can be illustrated by taking a brief look at Econet’s rise.
Before Econet listed on the Zimbabwe Stock Exchange in 1998 the company’s shares were worth roughly US$0,12. These shares are now worth US$4,50 per share. Therefore, if an ordinary farmer or farm worker, miner or mine worker, senior government official or junior civil servant had invested say US$1 000 in 1998 their shares would now be worth a staggering US$37 500. Not to mention the thousands of dollars in dividend payments that would have been made over the years. Therefore, indigenisation is not just about the rich getting richer, it is about everyone else having the chance to get a share of the national cake. A look at the mining sector will illustrate two more ways in-which ordinary Zimbabweans can enrich themselves and their communities.

Youth Development, Indigenisation and Empowerment Minister Saviour Kasukuwere said that last year mines had export receipts of over US$1 billion, but only US$44 million accrued to the State in taxes and royalties. The vast majority of the remaining hundreds of millions of dollars in profit was repatriated overseas by foreign shareholders. Precious little of that money was channelled towards mineworkers or indeed the local communities by way of investment in housing, roads, schools, clinics etc.

Opting to raise levels of corporate tax and mining royalties would merely stifle production. Enter the advent of the Employee Share Ownership Plan (ESOP) and the Community Trust, both of which shall become the epitome of how Indigenisation will benefit the masses. The Community Trusts will provide local communities with over US$2billion for, among other things, roads, schools, agriculture and development.

An ESOP is a means through which employees can own a share of the company they work for. It is widely accepted that employee company shareholding increases production and profitability, and improves employees’ dedication and sense of ownership.

The Zimbabwe Stock Exchange’s total market capitalisation is US$4,1billion and 5 percent is essentially reserved for employees through ESOPs. Therefore ESOPs will put US$205million dollars directly into Zimbabwean workers’ pockets in the form of shares, which they can slowly pay back through rising share prices and dividends.

Crucially, officials spearheading the indigenisation programme have said that ESOPs will also be used to prioritise youth and women. This is vital because under colonial misrule black women suffered double-edged discrimination and disempowerment as women and as black people. The colonial economic system created conditions for the exploitation of women’s labour and dependence on men.

Since independence this imbalance has not been adequately redressed. Therefore, the economic independence that the democratisation of the Zimbabwean economy seeks to attain is incomplete and thus unattainable without prioritising women’s economic empowerment. However, gains in women’s economic opportunities in Zimbabwe lag behind these gains in women’s comparative capabilities.

A growing body of developmental research show this to be inefficient, since increased women’s labour force participation and shareholding is associated with faster economic growth and reduced poverty; women will benefit from their economic empowerment, but so too will men, children and society as a whole.

In sum, the business case for ESOPs prioritising the expansion of women’s economic opportunities is becoming increasingly evident; this is nothing more than smart economics. On the other hand, the targeting of ESOPs towards youths is less about the systemic prejudices created in the past that still effect women today. It is more about creating conditions for the nation’s youth to contribute to the nation’s future.

Youths make up the vast majority of the workforce in corporations and neither the past wrongs nor future’s promise can be addressed without prioritising youth economic empowerment. As a matter of fact the energy, innovative capacity and aspirations of youth constitute a capital that no society can afford to waste.

Apart from righting the wrongs of the past, the ongoing democratisation of the Zimbabwean economy is nothing short of a revolution. A revolution that will promote economic growth by enriching and empowering the ordinary Zimbabwean, developing his or her community and thereby strengthening the nation’s democracy.