Zimbabwe’s struggle for independence sought to reverse the effect of discriminatory policies and laws which lead to the economic marginalisation of the black people. The need for economic independence was quickly noticed just after the 1980 political independence. Economic independence meant securing greater participation of the black people in mainstream activities of the economy. In the early years of independence, the government of Zimbabwe took a reconciliatory approach hoping to see the racial divide between the whites and black being reduced and translating into greater economic space for black Zimbabweans. In the years between 1980 and 1990 a moderate approach to empower black people was pursued under the umbrella of the Small Enterprise Development Cooperation (SEDCO). The moderate approach soon received criticism from Affirmative Action Group and the Indigenous Business Development Centre (IBDC). The two were indigenisation lobby groups which preferred a radical approach to wealth redistribution (Nyamunda, 2016:43).
The pressure for black empowerment continued to mount, especially after the failure of economic adjustment programmes which made the poor worse-off. Furthermore, the willing- buyer-willing-seller concept failed to secure greater economic space for the blacks. In 2000, there were farm invasion by blacks who wanted the white farmers to give up land to blacks. The land reform together with unfavourable weather saw a decline in farm productivity and put pressure on the government to find solutions to the economic challenges. This was the time when opposition politics led by the Movement for Democratic Change (MDC) gained ground. The ruling party, the Zimbabwe African National Union (Patriotic Front) (ZANU (PF), then went into a politicised economic empowerment drive. This drive saw the fast-tracked land reform and the enactment of the Indigenisation and Economic Empowerment Act, Chapter 14:33 of 2007 (Raftopoulos, 1996a and 1996b; Chitsove, 2016:56).
The indigenisation Act was supported by a number of regulations. Among them were the Indigenisation and Economic Empowerment Act (General) Regulations 2010 Statutory
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Instrument (SI) 21/2010 which was amended by SI 116/2010; 34/2011; 84/2011 and 66/2013.
There was also the Indigenisation and Economic Empowerment Act (General) Regulations 459 of 2011 and 280 of 2012 (Chitsove, 2016:59).
In Zimbabwe indigenisation was implemented as the Indigenisation and Economic Empowerment Programme (IEEP). Anderson (2010:424) saw indigenisation and economic empowerment in Zimbabwe as a way by the government to negotiate what was generally regarded as residual dominance of white colonial populations by using developmental and cultural policies which are regarded as necessary to bring back sovereignty to Africans. He further argued that indigenisation has become a policy option of choice for restructuring independent states in Africa, especially in the SADC.
In Zimbabwe, indigenisation of the economy is regarded as part of the third ‘Chimurenga’, a third phase in the struggle for Zimbabwe’s independence. By making it a part of the struggle for independence, Anderson (2010:424) noted that the government of Zimbabwe had framed the
‘settler problem’ and politicised the issue. It is therefore crucial to understand how the ‘settler problem’ was packaged as a political issue. In Zimbabwe indigenisation enabled the government to keep in place a network of patronage and officially repeated statements become highly divisive and exclusivist, wrapped in the argument that it was all about reclaiming African values and sovereignty. Evident in the economic policies of Zimbabwe is that they have been profoundly shaped by the colonial legacy, in that they seek for indigenisation to be part of policy for development. For Zimbabwe the framework that influenced the indigenisation policy kept changing to suit the prevailing political climate.
Craig (2002:571) noted that indigenisation projects in Zimbabwe have been done with varying levels of success. Greater success has been hampered by high levels of politicisation of the process in which a class of African business people has emerged which survives on high levels of political support and sponsorship. As Beveridge (1974) observed in his study of indigenisation in Zambia, in Zimbabwe there was again the issue of indigenisation coming with a cost to the economic development of the country. Also noted was the increase in inequality among the black people.
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Perhaps the success of indigenisation would be noticeable in future, but for now the cost of indigenisation by way of slowed down economic development has had a negative effect on the very same poor people the policy is meant to serve. Indigenisation in Zimbabwe was expected to stimulate greater participation by Zimbabweans in the mainstream economy, but it has seen the slowing down of economic activities making the same poor majority suffer while the free politically connected blacks enjoy their wealth. Magure (2012:67) argues that while it can be agreed that there was a need for Zimbabwe to correct colonially induced injustices and racial social and economic imbalances such as the ownership of the means of production, the approach to indigenisation of a one-size-fits-all is fundamentally flawed. He argued that the approach taken by Zimbabwe towards indigenisation deters foreign investors, an issue which could continue to damage the fragile and already weak economy. The observation by Magure was made at a time when there was a requirement for companies with an annual turnover of more than $500 000.00 to cede 51 percent shares to be owned by indigenous Zimbabweans. This ‘one- size-fits-all’ approach was recently revised after the former President of Zimbabwe RG Mugabe stepped down. The new dispensation has amended the indigenisation law to limit the 51-49 percent ownership requirement only to natural resources-based investments. The earlier ownership requirement was to be achieved in the five years from the time the law came to force or from the time of start of business.
A similar effort had been made by the former the President in April 2016 where he clarified different positions on the interpretation of the indigenisation law. The clarification required the amendment of the law. The official government statement was that:
One talking point especially on the investors’ world is related to the indigenisation law and we found ourselves in an invidious position where the law, as presently constructed, promised empowerment for the indigenous without delivering it on the other hand, while creating discomfort or even suspicion to would be investors on the other hand.
(Charamba, 2017:1)
The statement by the government of Zimbabwe is a clear acknowledgement that the ‘one-size- fits-all’ as observed by Magure (2012) was in fact driving away the much-needed foreign investors. In the end the indigenisation policy which sought to deliver wealth to the poor was
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making them worse-off. In a similar acknowledgement of the limitations of the law, former president RG Mugabe had said the implementation of the law was to be done in three distinct sectors, the natural resource sector, the non-resource sector, and the reserved Sector 13 (Ndlovu, 2014). It was in the natural resource sector where activities such as mining are undertaken where the 51 percent for government or indigenous people ownership was called for. Partner investors were expected to take up to 49 percent. Not less than 75 percent of the gross value of the exploited resources was expected to remain in Zimbabwe in the form of wages, salaries, taxes, community ownership schemes and other value chain activities (Charamba, 2017:1).
The non-resource sectors covered investment into beneficiation of raw materials, appropriate technology transfer to Zimbabwe with the intention of improving productivity, imparting new skills and creating employment for Zimbabweans and allowing ownership by indigenous Zimbabweans. Such agreements would be entered into with a view to promoting foreign direct investment into Zimbabwe and were to be managed by line ministries and not the Minister of Indigenisation and Economic Empowerment. This Ministry was, however, abolished in the new dispensation that came to power at the end of 2017. The recent policy shift in the approach to indigenisation in Zimbabwe clearly confirms that the economic ethic was highly politicised and self-destructive to the economy and not benefitting the majority poor as required by utilitarianism in ethics. Part of the failed economic performance Zimbabwe in the last decade plus and the failure to attract the much-needed foreign direct investment can be attributed to policies like indigenisation.
For the government of Zimbabwe, “…’indigenisation’ means a deliberate involvement of indigenous Zimbabweans in the economic activities of the country, to which hitherto they had no access, so as to ensure the equitable ownership of the nation’s resources” (Government of Zimbabwe, 2007:2).
The definition of indigenisation clearly focuses the indigenisation efforts towards addressing the issues arising from the discriminatory practices that were in place before Zimbabwe’s independence. The whole effort was to benefit the indigenous Zimbabwean who is defined as:
…any person who, before the 18th April 1980, was disadvantaged by unfair discrimination on the grounds of his or her race, and any descendant of such person, and
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includes any company, association, syndicate or partnership of which indigenous Zimbabweans form the majority of the members or hold the controlling interest.
(Government of Zimbabwe, 2007: 2).
The understanding of an indigenous Zimbabwean focuses on the Zimbabweans who were discriminated against before the 1980 independence of the Zimbabwe. These discriminated against are not limited to people, but companies, associations, syndicates and partnerships owned by indigenous Zimbabweans. The definition clearly excludes any other citizens or organisation within the SADC who are not Zimbabwean. In this understanding of the indigenous Zimbabwean, regional potential investors who are not Zimbabweans do not benefit from the law and may not be able to benefit from deliberate regional integration measures that seek to promote their participation in the Zimbabwean economy. Effectively, the indigenisation law in Zimbabwe discriminates against any potential investor for the SADC and not from Zimbabwe, and favours those who were disadvantaged before 18 April 1980 who are Zimbabweans.
The approach to indigenisation in Zimbabwe therefore only seeks to promote the Zimbabwean capitalism and not a SADC regional capitalism. Unfortunately, as observed by Maphosa (1998:176), the indigenous people do not have capital or resources to acquire stakes in companies. The Independent of 28 October 2005 reported that the history of empowerment in Zimbabwe was full of examples of failure. In cases where the deals went through, indigenisation created elites who became super-rich at the expense of the poor majority. In addition, the Independent noted the confusion that was brought about to investors including those from the SADC region. For local indigenous people their failure to acquire shares was confirmed by failure to take up 15 percent of Zimplats stake and 15 to 20 percent of shares of the Anglo American Corporation Zimbabwe which were on offer at that time (The Independent, 2005).
The approach to indigenisation in Zimbabwe before President Munangagwa’s government lacked clarity on the approach to indigenisation and discouraged foreign investors, making the local economy shrink and fail to uplift the very poor previously marginalised Zimbabweans who had no capacity to invest or acquire stakes (Ndlovu, 2011). The approach was fundamentally not supportive of the principles of regional integration as it worked like a barrier to intra-regional investment and trade. Again, the indigenisation laws put in place marked regulations which
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contradicted the expectations of neo-liberal global capitalism thus attracting resistance from the western capitalist investors (Munck, 2005). For those reasons, resistance by global economic players to indigenisation had the effect of slowing down economic growth and development in Zimbabwe. There is therefore a need to rethink the African economic ethic of indigenisation in Zimbabwe as it has not delivered the intended utility to the poor previously marginalised indigenous people. It would therefore fail the utilitarianism ethics test.
Whatever form it takes, indigenisation should bring development and economic growth rather than stall it. It must be aimed at reducing poverty and help create indigenous capitalists.
Restricting the definition only to include Zimbabweans would constrain potential regional investors. A regional approach could offer a viable alternative. As Chitambara, (2011) argued, indigenisation should create indigenous capitalists who can help create new wealth for economic growth rather than simply distributing the existing wealth. Wealth creation would require the creation of indigenous capitalists. A balance has to be found between indigenisation, regional integration and neo-liberal global capitalisms. On the whole the indigenisation drive should not be seen as a way of promoting crony capitalists (Mazrui, 1986:215; Murove, 2010:52; Hobden and Jones, 2011:133-136). It should be people-centred and bring development and wealth to the majority, as called for by the ethic of utilitarianism.
On the other hand, white Zimbabweans found the indigenisation law unethical in making them responsible for the empowerment of the blacks. They argue that the view that the law assumes that they or even their descendants are beneficiaries of past colonial privileges may not be true for all cases. They view the law as unfair discrimination on the basis of race or origin, which in fact is the very issue the indigenisation law is intended to address. The calls for the redefinition of ‘indigenous’ in line with the dictionary have been stated as: “born of or produced naturally in a region; belonging naturally.” In this definition, they find descendants of whites in Zimbabwe qualifying as indigenous people (Matyszak, 2011).
If the indigenous law is applied on the basis of race and origin, then it would lead to the exclusion of descendants of whites in Zimbabwe and their sense of belonging will be lost and they will not participate in economic development. In rethinking the African economic ethic of indigenisation there is a need to redefine who an indigenous Zimbabwean is. It has also been
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noted that the law does not specify any other form of who they call an indigenous Zimbabwean.
In this case Matyszak argues that this was deliberate to enable individual blacks to own investments in the minerals or natural resources sector. The indigenous law in Zimbabwe has certain clauses meant to enrich the elite, thus defeating the other much said intention of fighting poverty. Also disturbing in the regulations is the power that a minister would have to accept or reject an indigenisation plan (Raftopoulos,1996; Matyszak, 2011). This might lead to channelling of opportunities to a few well-connected (Mazrui, 1986:215; Murove, 2010:52). On another note, such control of the free flow of investment conflicts with neo-liberal capitalist thinking (Munck, 2005; Matyszak, 2011).