Empowerment laws can trigger Chaos: ZCTU

HARARE – Zimbabwe’s labour movement on Thursday warned that controversial empowerment regulations announced last week could plunge the country’s struggling industrial sector into chaos similar to the one triggered by President Robert Mugabe’s chaotic agrarian reforms in 2000.

Zimbabwe announced a new set of empowerment laws compelling foreign-owned firms to cede controlling stake to locals.

The announcement of the regulations by Indigenisation Minister Saviour Kasukuwere triggered an uproar from Prime Minister Morgan Tsvangirai’s MDC-T party, which said such policies were supposed to be negotiated under the terms of a September 2008 power-sharing agreement that set up the country’s unity government.

“We believe this move that is coming under the guise of empowering ‘indigenous people’ has the potential to throw the country into anarchy just like the chaotic land reform programme did,” said ZCTU secretary general
Wellington Chibebe.

“Even within the inclusive government there is no accord and consensus on this regulation with the MDC-T alleging that they were also not consulted and involved. This is a recipe for economic and political disaster,” he
added.

The regulations that have sent foreign-owned firms into panic with threats of imprisonment for foreign shareholders (or presumably their local representatives) who fail to sell 51 percent stake to indigenous Zimbabweans within the next five years, have also been criticised by the country’s business leaders.

The ZCTU chief said his organisation had noted that there was insufficient stakeholder involvement and participation in crafting the policy, adding that it was “just one of the top-down and populist policies being foisted on the economy by government”.

The labour body said it was unfortunate that such moves had been the hallmark of government policy formulation for a long time with the announcement of the regulations exposing that promoters of the controversial law were unwilling to learn from past mistakes.

“The government does not have the money to buy the majority shareholding in the targeted businesses and there is a risk that this will result in another massive expropriation of businesses by ZANU PF-linked gurus along the lines of the chaotic and negative-sum game of the land reform exercise,” said Chibebe.

Mugabe on Wednesday endorsed the controversial empowerment laws, saying the 49 percent shareholding to be left in the hands of foreign investors was enough.

“Forty-nine percent is a hell lot,” said Mugabe after officially opening an investment conference in Harare, adding; It’s only them that are saying it’s small and it’s foolish and selfish.”

But the ZCTU warned the regulations would create disincentives for private sector investment.  It said there would be no creation of new wealth since government will simply “help itself to other people’s sweat and efforts by expropriating existing businesses”.

Confederation of Zimbabwe Industries (CZI) president Kumbirai Katsande last week said business would lobby the government over the new regulations that Kasukuwere said will become effective on March 1.

Under the empowerment regulations foreign-owned businesses operating in Zimbabwe will be forced to sell a majority stake to locals by March 2015.