HARARE - Thousands will be jobless if government goes ahead with its Indigenisation and Empowerment Act directive, economic experts have warned.
This follows Wednesday’s announcement by Indigenisation minister Patrick Zhuwao that all foreign-owned companies face closure unless they sell or give up 51 percent of their shares to black Zimbabweans by April 1.
Former Finance minister Tendai Biti yesterday described the directive as “fascist”.
He said the move had dire consequences for the jobless men and women on the streets.
He added that the move was an attempt by government to create an illusion of reform necessitated by the worsening financial woes facing government, which is failing to raise enough salaries for its bloated workforce.
“It’s a reflection of a government that is desperate, that is at war with itself,” Biti told the Daily News on Sunday yesterday.
“We are already in an economic recession characterised by deflation, weak aggregate demand, deindustrialisation and massive job losses.”
Zanu PF won the 2013 election on the back of an ambitious promise of creating 2,2 million jobs but that still remains a pipedream.
Experts feel the provisions the Indigenisation and Empowerment Act can only spell doom.
“We are desperate for foreign investment. This entire fascist move to close so-called non-complaint companies confirms that Zimbabwe has become a pariah state. And until Zanu PF reforms, we are not going anywhere,” Biti said.
Economic expert Eddie Cross said the Indigenisation and Empowerment Act had failed to yield results in the past, proof that this directive will have little or no benefit for the country’s economic woes.
“If you are fishing in a river and you are not attracting any fish it’s not that there are no investors in the river, it’s not that people don’t want your platinum, but it’s because your bait is wrong,” Cross said.
“Whether you are in favour of indigenisation, empowerment, you simply got to answer the question, why is it not attracting investors?
“The answer is simple. Who is going to invest $100 and be left with $49 and no control of the business? You need to be crazy and there are not many crazy business people out there,” he said.
Economic analyst Vince Musewe said Mugabe’s endorsement of the directive is a slap in the face of the IMF re-engagement efforts which recently approved Zimbabwe’s efforts towards normalising its relations with various international creditors.
“Any effort towards re-engaging with Zimbabwe must be based on clear deliverables on the key areas of reform which for one is repealing of the Indigenisation and Empowerment Act in its totality as it is just a haven to promote and sustain Zanu PF’s patronage and corruption while chasing away crucial investments into the economy,” he said.
Zhuwao has warned defiant companies they would face the full wrath of the law if they contemptuously continued to show disregard for Mugabe and the country’s laws.
“It is March 23, 2016, three months into 2016, and businesses have continued to disregard Zimbabwe’s indigenisation laws, as if daring the president and government to do something about their contemptuous behaviour,” he said.
“The failure to adhere to the laws of our land must attract immediate consequences that must be severe and dire enough to ensure that the law is respected and adhered to.”