On Friday the Ministry responsible for the indigenization exercise launched in 2007 by the then Zanu PF dominated Government, published another set of Regulations that would, if implemented, have effectively nationalized all firms in the country.
Kasukuwere - enforcer of a law that was neither approved by Cabinet, nor approved by the Parliamentary Legal Committee
The new Regulations give companies a year to comply and sets out penalties for non compliance, and Included in the new sweeping attempt at indigenization are the 100 or so private schools in the country.
In some quarters there was instant panic, but I was generally impressed that very few seemed to take the action seriously. One Headmaster of a private school had not even heard about it and had not been contacted by anxious parents or Board members.
However, eTV in South Africa took it seriously, running a detailed clip on their main news covering the new regulations and the threats that went with them. Just what is the real position on this new drive by Zanu PF elements in the GNU Government?
First we need to understand where this came from. In 2007, the Zanu PF government came to Parliament with the new Act. MDC held a minority position in the lower House at the time and vigorously opposed the legislation.
After a lengthy fight the MDC withdrew before the vote, knowing that had they stayed they would have been out voted. They chose rather to make a firm statement that this new legislation did not have their support in any way.
The implementation of the Act was overtaken by the subsequent events – the signing of the Kariba Agreement in September, the subsequent electoral reforms and then the 2008 elections where Zanu was defeated but was able to manipulate the result and prevent a total transfer of power.
Instead they found themselves, in February 2009, in a National Unity Government with MDC and forced to share power for the first time since 1980.
It is important for people to understand the nature of this GNU arrangement – it left the President (even though he had been defeated in the elections) as Head of State, Chairman of Cabinet and the Commander of the Armed Forces.
But what many do not appreciate, the new Cabinet was obliged to make all decisions on a consensual basis – MDC held a majority in Cabinet but could not use its majority by voting on issues before the Cabinet for a decision. This has been a recipe for deadlock and this has now reached the point where the Government is almost paralyzed.
In this arrangement, the Prime Minister is in charge of the running of Government and all Ministers, irrespective of their party affiliation are required to report to him. He is responsible for Government policy implementation and has complete power in this respect.
This means that any major new legislation or regulations must go through the Cabinet system first, before being implemented under the supervision and direction of the Prime Minister.
The attempt by Zanu PF to circumvent this system with the implementation of the Indigenization Act of 2007; can only be carried out lawfully and with the support of Government. Once the regulations giving the Act force and effect are passed through the Cabinet, where they would require the support of MDC, they then go into use supervised overall by the Prime Minister, under whose direction the line Minister would be required to operate.
The reality is that the regulations published first in December 2010 and then again last year and now in July 2012, have never been through the Cabinet system – they did not go to the Cabinet Committee on new legislation and were not given Cabinet authority and approval.
In addition, the Legal Committee in Parliament has ruled that the new regulations violate elements of the constitution and are therefore not legal.
The Prime Minister’s first response to this development in 2011 was to say these regulations are not legally binding and therefore have no force or effect. On the ground however, Zanu PF has been trying to force compliance.
Kasukawere, the Minister responsible, has been saying that he was the Minister responsible for the Act and that he had the right to implement the Act and that his regulations, despite the illegality of the whole thing, were binding.
It is now two years since this road show was launched – its objectives are clear, like the so called “Land Reform” exercise it has nothing to do with reform in any sense, it is a political platform for a phantom election.
Its secondary purpose is to derail the economic recovery by discouraging inward investment and encouraging capital flight. Not recognizing the much diminished power and authority of Zanu PF in the new Government, the private sector has reacted as if the game has not changed; investment has dried up, the stock market has collapsed to very low levels and local capital is fleeing the country in significant quantities.
The recovery in the economy is stalled, wages are stagnating for lack of resources and Zanu PF is trying to blame the MDC for the problems.
This drive to halt the recovery is seen in several other areas – the total failure to get any recovery in the railways, attempts to block the ESSAR and Green Fuel deals and the total collapse of Air Zimbabwe are all deliberate Zanu PF ploys.
But what of the Indigenization circus? The regulations published on Friday last week really do reveal the Minister for the clown he is. The regulations are clearly illegal; they violate the Constitution and they have not gone through the required procedure to become law.
The Prime Minister simply advised the target groups to ignore the regulations and the Minister and carry on as normal. The reality is that despite all the rhetoric, not a single firm has been indigenized since 2010.
One of the main targets – the mining industry, has stated that the State, or anyone else, can have 51 per cent of all mines tomorrow, they would be delighted to be handed $7 billion in cash and then to have these new partners (whoever they are) fund 51 per cent of all new development or see their equity stake diminished rapidly.
It is nonsense, we do not have the expertise and technology to run these firms and we certainly do not have the money after Zanu PF wiped out all savings and reserves of any kind in the decade up to 2008.
In addition to the debacle that this represents, it is not even going to help Zanu PF in any election that comes up in the next 12 to 18 months. The people know that Zanu PF promises are just that, empty promises that will not mean a thing to them as individuals, families or communities.
They promised the land – all we have left are derelict farms, no jobs and imported food at higher prices. Now they promise us shares for nothing – they are trying to deceive us again and we would be fools to be taken for a ride the second time and watch what is left of our broken economy, go down the tubes.
Bulawayo, 5th July 2012
First published on eddiecross.africanheard.com, see also Zanu (PF) Strategy Post Luanda