HARARE – The move by the National Indigenisation and Economic Empowerment Board (NIEEB) to licence local indigenous companies is more of a fundraising campaign than a genuine cause to help the struggling firms.
NIEEB, which was created to implement government’s indigenisation programme that compels foreign owned companies to cede 51 percent shareholding to local people, recently announced that indigenous companies must also get indigenisation certificates.
Both foreign and locally-owned companies operating in the country are now required to have a full compliance certificate that costs $5 000, while a provisional certificate costs $10 000 with a 100 percent indigenisation compliance certificate costing $2 000.
This is a diversion from the indigenisation agenda. Why should indigenisation, targeted at foreign-owned companies rope in local firms.
Coming at a time when the manufacturing industry is operating below 50 percent capacity, and the liquidity crisis continues to bite into the balance sheets of most companies in the country, requesting these businesses to pay in excess of $2 000 to be licensed is tantamount to extortion.
The lame excuse by NIEEB that companies with compliance certificates would be considered to participate in indigenous transactions does not hold water.
Indigenisation minister Saviour Kasukuwere, who is on record saying he wants all foreign-owned companies to indigenise or risk having their licenses cancelled, must put his house in order and stop milking local companies.
Unconfirmed reports say more than 200 companies have closed shop since the introduction of multi- currency and more firms are expected to shut down as labour disputes and stiff competition from cheap imports continue unabated.
It would make sense for NIEEB to use its Empowerment Fund to provide liquidity to embattled local companies to procure latest machinery and for retooling purposes so that they can be competitive.
Not getting money out of them!
Last week, NIEEB chairperson Retired Lieutenant generalMike Nyambuya was bragging that the Empowerment Fund is now worth close to $2 billion and is expected to double to $4 billion by year end.
Instead of liquidating these assets and injecting cheap money into the economy, it seems the Indigenisation ministry is bent on reducing the cake rather than expanding it for the benefit of everyone.
Kumbirai Katsande, Confederation of Zimbabwe Industries president sums up nicely the dilemma we are facing as a country due to policy inconsistencies and greediness on the part of government.
Katsande said world over; countries are converging to better macro-economic policies — control of budget deficits, healthy external payment balances, lower inflation and enhanced investment climate.
“As a country, we are still to accept the need for this discipline. This will be part of our undoing. Prosperity and poverty are the results of policy choices and not resource endowment,” he said. – Staff Writer