Lessons from Zimbabwe

2010-12-18 10:52

I recently had dinner in Harare with the minister of youth, empowerment and indigenisation, Saviour “Tyson” Kasukuwere.  

We got to know each other when I was chief ­executive of the Umsobomvu Youth Fund.

We met in late 2008 after the controversial elections that were settled through a power-sharing deal.

He came to South Africa to study how he could create a fund to support young entrepreneurs.

I got the impression that the indigenisation and empowerment aspect of his job was being taken lightly then, but now there is not a newspaper in which he is not featured prominently.

Zimbabwe has all the ingredients for it to succeed?– arable land, vast mineral ­resources and a learned population that loves education.

Zimbabwe has struggled over the past six years due to political and business attitudes that brought it close to total ruin.

The reaction of foreign companies to the empowerment law – that 51% shareholding should be held by either the indigenous population or a sovereign fund?– will become clear over the next six months.

The first to be targeted are mining companies, followed probably by banks or foreign financial services firms.

Massmart has indicated that it would pull out of the country rather than dispose of 51% of its equity under the indigenisation and empowerment policy.

The most important thing for me is what can South Africa learn from the situation?

Firstly, we have the chance to embrace a lawful and equitable empowerment process before it degenerates into expropriation.

The reaction to the nationalisation debate, for example, has not come with concrete proposals on how the majority can share in the mineral wealth of this country.

It has mostly been criticised without alternatives being discussed and, therefore, not constructive.

Will we see land grabs because the poor have run out of steam, because every effort by government to champion a lawful wealth redistribution process has been frustrated by corporate indifference?

Secondly, the political class?– seen as benefiting due to its political stature?– is an albatross for any liberation movement.

Poor people feel betrayed by the political elite who are seen to have used political office to benefit themselves, their spouses, children, friends and extended family.

That is why Cosatu’s charge about corruption or the allegations about tenderpreneurship should not be swept under the carpet.

At some stage, these issues must be discussed openly within the ANC alliance movement.

Thirdly, the lack of a sizeable small and medium enterprises sector precipitated the collapse of the Zimbabwean economy.

Primarily, the source of employment was the primary sectors – mining and agriculture, and government.

The lack of an entrepreneurial class or middle strata founded on the bedrock of viable small and medium enterprises run by the indigenous population meant that as companies pulled out, there were few entrepreneurs who could step in.

In South Africa, for example, when foreign companies pulled out due to sanctions, it created an opportunity for capable management to lead a series of buyouts and thus the birth of private equity/venture capital. Moreover, big local firms acquired the operations of exiting firms.

Lastly, government cannot do it alone. There is a need for effective partnership ­between government, organised labour, business and civil society to broaden the frontiers against poverty. 

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