Zimbabwe’s indigenisation policy could potentially be defended on aesthetic moral grounds. "Zimbabwe for Zimbabweans" is the often repeated political rally that has spurred many a heartfelt roar. However, the enormous costs (both monetary and social) must be taken into account. Business is inherently about making profits for its owners, who stand to make these profits by taking on a personally acceptable level of risk. In this particular case, what is being discussed is 51% ownership.

This essentially translates to 51% corporate control. It is absurd to believe on any level that a business owner will be willing to part with the controlling share of his livelihood. It is a noble idea to engage the country’s own people with control of their future, but the facts surrounding Zimbabwe in particular do not purport this initiative at all. Although the country boasted the highest literacy level in Africa pre 1999, it is now a non-negotiable fact that we now posses one of the lowest levels of education in the world. So who exactly do we want to put in charge of future economic growth? Those with no experience or education in the business field, or those who possess the ability and desire (spurred by profit making potential) to take charge of the initiative more efficiently and successfully, no matter who they are?

Why is the existing government so opposed to opening the economy to outsiders? We have been living in political and global isolation for the last 10 years, and what have the indigenous people of Zimbabwe done for local business in that time? Nothing. Look at the state of the roads, the shops, the fact that millions of people are starving because of a self inflicted silent genocide. Local production and manufacturing is non-existent, there are less jobs and a critically low level of education, which is the lifeblood of long-run growth. Only a fool would say the country in a better state now than it was 10 years ago.

However, a light at the end of the tunnel gave us a glimmer of hope in 2008 in the form of a “power sharing” deal. The outside world began to think that Zimbabwe was not such a lost cause and money began to pour in as politicians began the mammoth task of rebranding the country. Again, notice that it was outsider’s money that made the difference. There is no money in the Zimbabwean government’s coffers. Where do they plan to get the capital needed to bring about the success of the National Indigenisation and Economic Empowerment Fund if not from their own pockets? They will have to borrow it from outside the country, the very people they are stealing corporate ownership from in the first place. Why would anyone in their right mind lend to someone who has just stolen from them... they will not and the fund will collapse. This is not hard to see and the ZANU PF government know it.

The fund is a sham in itself, and is merely a political tool to secure votes from the uneducated, disillusioned and brain washed populace. The Zimbabwean people are resilient, hardworking and innovative with a shrewd business mentality that is ingrained in who we are. I say welcome as much FDI as possible and let the Zimbabwean people learn from these outsiders, secure jobs in their companies, make money from them and then eventually when they possess the knowhow, to start on their own using funds borrowed from banks both foreign and domestic.

FDI is needed badly in the country and the government should be doing everything in its power to welcome it, nurture it and benefit from it. It should also be avoiding any activities which may deter it. The plans they have set out in the indigenization project are vague and without any framework regarding fairness. The undertone is there, as it was in the land reform, to get rid of every white person in the country, why? For votes. Not for the prosperity of the country or its people, indeed, look at where we are following the land reform. There are by far many more rich black elite than rich white elite in the country, more black owned companies than white, but again, if you are a black man from Zambia, your business is safer from nationalization than that of a white man whose family has lived in Zimbabwe for three generations. Where is the morality in this?

The country has only just begun to pick up the pieces following a disastrous land reform policy and now the government has set itself upon a course that will bring a country already on its knees, onto its face. If the project goes ahead, every company that is indigenised will lose the vast majority of its value. Surely owning something of no value is far less desirable than benefiting from something that you do not necessarily own. The mere fact that investment in Zimbabwe and the ZSE in particular has entirely shut down since the proposal to go ahead with the business indigenisation project is proof enough that this endeavour will not work, and that investors will in fact be deterred by this initiative. Without this investment, there will be no jobs for ordinary people (not that there are many at the moment anyway) there will therefore be no income for their families who would not be able to spend it anyway in empty shops, their shelves empty of both foreign goods and those produced in the country using foreign capital.

You say that there are “a litany of very successful and wealthy individuals that own far less than 50% of the corporations they invest in.” This is true beyond a doubt but what you ignore is the entire idea that motivates investment, profits. People, especially those who are shrewd enough to have made money in the stock markets, will only invest in profit making ventures which offer them a personally acceptable level of risk.

This risk can take many forms, for example (because they are relevant), management risk and political risk. With a loss of control (represented by a government owned 51%... and yes it will be initially government owned, no matter how you object that they will give it to the people) comes the risk of management upheaval, not only in its makeup (because often investors invest in the people running the company not only the company itself) but also in the form of its goals and direction. Secondly, if a government can just decide one day to take 51% of a company from its owners (who are largely shareholders) then what is to stop them doing it again, and even just taking money out of the stock market directly.

The scope for corruption and instability are boundless and this is why no one will be willing to invest in Zimbabwe if this project is allowed to run its course.

"Connor"