Workers protest highlights flaw of Indigenisation policy
by Irene Madongo
24 January 2011
Local businesses that take over companies through the Indigenisation Act
will have difficulties running them, unless the government provides them
with the necessary support an analyst has said.
The comments were made following a demonstration by workers because their
new owner was failing to pay them or run the company properly.
On Thursday it was reported that workers from a branch of Jaggers
Wholesalers in Harare stormed ZANU PF headquarters to protest against the
government’s indigenisation policy that has left them without work or pay
for months. Robert Mugabe’s party has been championing the policy, despite
criticism from both inside and outside the country that it will only put off
investors and damage Zimbabwe’s ailing economy.
Jaggers is now owned by businessman Cecil Muderede, an indigenous Zimbabwean
who took over the wholesaler last year, reportedly because of the
controversial indigenisation policy.
On Monday economic commentator Bekithemba Mhlanga said the case of Jaggers
shows that businesses are being verbally encouraged to take over companies
but not been given the technical and financial support, which results in the
businesses failing.
“They could have had the moral support to say ‘Go ahead and nothing will
happen to you’, without saying ‘If you are going to take over Jaggers here
are the accountants, the analysts, the business administration and here is a
bank account,” he explained, “I doubt if they are getting that kind of
support – they are just getting moral support.”
“There are so many processes, so many systems, people issues to manage and a
person wakes up in the morning and says, ‘Look, I can’t do this’ and the
whole thing falls apart,’” Mhlanga said.
However despite these shortfalls ZANU PF has forged ahead with its support
for the implementation of the Act, to the point of openly saying it will be
used to punish foreign owned companies in the country.
Two weeks ago Defence Minister Emmerson Mnangagwa, who is tipped to be
Mugabe’s successor, reportedly told supporters at a rally that heads of
foreign firms could be forced to go on radio to publicly denounce what he
called ‘western sanctions’ or face losing 90% of their company shareholding.
Mnangagwa’s remarks came after Mugabe declared last month that unless the
targeted sanctions are removed, the government would use the Act to take
away 100% shareholding of foreign ownership.
The targeted sanctions have been slapped on Mugabe and his inner circle for
human rights abuses.