Indigenisation an elitist transfer of wealth: Biti
26/04/2013 00:00:00
by Staff Reporter
MDC-T secretary general and Finance Minister, Tendai Biti, has dismissed the
indigenisation programme as an “elitist transfer” of wealth which will not
create any “new value” or achieve broad-based economic empowerment.
Under the programme, which is being driven by President Robert Mugabe and
his Zanu PF party, foreign companies must cede control and ownership of at
least 51 percent of their Zimbabwe operations to locals.
Biti’s MDC-T party – which has been in an uneasy coalition with Zanu PF
since 2009 – says while it backs the principle of economic empowerment, it
was opposed to the model being implemented by Zanu PF.
And speaking in London this week as he returned from meetings with the
International Monetary Fund (IMF) in Washington, the Treasury chief said the
approach taken by Zanu PF would not work.
He said: “What method and formula are you using? This is where, from a
purely scientific view, the Indigenisation Act is found wanting … The law
obliges the indigenous entity the duty to buy [51% equity in existing
firms].
“It is a model that is not creating new value. Secondly it is a programme
that is elitist in nature; now, which ordinary person has that kind of
money?
Biti said Zanu PF’s equity transfer approach does not take into account the
fact that Zimbabwe is a small economy with a budget of $4 billion and in
need of capital in the form of foreign direct investment, overseas
development assistance and savings.
“In short, it’s a programme that needs to be revisited. But despite that,
indigenisation on the ground has not been a hindrance to any serious
investor in Zimbabwe,” he said.
“That’s why there’s been no capital flight. In fact, to those that are
adopting a wait and see attitude, the train is moving”.
Meanwhile, Biti also revealed that he had been granted Cabinet approval to
levy new taxes on the mining sector as the government scrambles for cash to
fund elections due this year.
He however, assured miners that he would not be raiding their pockets for
the US$132 million needed for the polls which will elect a successor to the
coalition government.
Zanu PF and the MDC formations have still to reach a deal over the exact
timing of the polls but Biti said working together in the coalition
government had helped ease distrust between the parties and anxieties about
political transition in the country.
“For Zanu PF, they’re worried about transitional justice and would want
guarantees that the fate of the Charles Taylors [of this world does not
befall them],” he said, adding that it was also important to ensure that any
resultant new dispensation did not exclude the old order.