Confeder
5
-6 August 2004, Victoria Falls
The Honourable J.T. Tungamirai, MP
Minister
of State for Indigenisation and Empowerment
Office of the President and
Cabinet
The President of the Confederation of Zimbabwe Industries:
Mr A. Mandiwanza
Honourable
Ministers
Honourable
Governor of Matabeleland North
Honourable
Members of Parliament
Your
Excellencies, Members of the Diplomatic Corps
Captains of Industry and Commerce
Distinguished
Guests
Ladies
and Gentlemen
I
think it is crucial that we appreciate that business thrives in an environment
that is stable and predictable with some measure of centainity.
Social stability is a prerequisite.
This stability is guaranteed by an equitable and fair environment.
It is Government’s decision to deliver such an environment. In this pursuit, focus has been all the commanding heights of
our economy beginning with land redistribution.
Land redistribution is the highest stage or form of empowerment.
With the end of the fast track land resettlement programme, empowerment
efforts are now directed at the rest of the sectors of the economy.
These
sector are being researched into and a data bank will be created that will
have information on the major Sectoral players at macrolevel right through to
the micro and individual shareholders level.
The approach will encompass strategic analysis of the chosen
establishments including management and worker interests, local area
involvement, technical partners and viability concerns.
Let
me highlight to you the background to some of the economic empowerment
programmes/activities that have so far been undertaken:
Government
evolved a policy framework for the Indigenisation of the Economy in February
1998 and it is currently being implemented.
The Scientific and Industrial Research Development Centre conducted a
Research on the Indigenisation of the economy, and the study has shown that
indigenous entrepreneurs need to participate more in the strategic sectors of
agriculture, manufacturing, tourism, mining, construction and energy.
Further, research studies on legislation and Government policies that
stand in the way of Indigenisation were commissioned and some of the
recommendations are being implemented.
In
terms of financial support, the Government of Zimbabwe has been allocating
large sums of money for borrowing by indigenous entrepreneurs to the
Ministries of Industry and International Trade, Youth Development, Gender and
Employment Creation, and the Ministry of Small and Medium Enterprises.
The
Ministry of Industry and International Trade’s Distressed Company Fund,
accessed through the Zimbabwe Development Bank, had Z$1 billion allocated in
each of the years 2002 and 2003.
The
Employment Creation Fund in the Ministry of Youth Development, Gender and
Employment Creation is for unregistered micro-enterprises targeted especially
at women, youth and the unemployed. In
2003, Z$700 million was allocated to the Fund and Z$800 million was also
provided for 2004.
The Ministry of Small to Medium Enterprises, through Sedco, administers the Small and Medium Enterprise Revolving Fund which target registered indigenous Small and Medium Enterprises. For this year, Z$8.5 billion was allocated for the recapitalisation of Sedco.
Indigenisation
and Economic empowerment is made possible and indeed much more smooth in
economic circumstances that are characterised by growth of the economy.
Such an environment averts the struggle for the common cake while new
players get accommodated in an incremental way.
Therefore the whole action of deliberately empowering the indigenous
people should be viewed in a dynamic sense.
It is for this reason that economic indigenisation requires the
unreserved support of both the private and public sectors for it to succeed.
It increases the growth potential.
As
indigenisation becomes entrenched and appreciated in our business ethos, it
becomes a real foundation for economic empowerment. We can characterise economic empowerment as a process that
evolve a strong domestic private sector that is reflective of equity in the
distribution of the productive assets of our economy among all citizens.
That is a clear basis for growth with equity.
It somewhat shies away from egalitarianism but enhances just and
democratic values that underpin equity. As
this engenders sustainable economic growth, employment creation and therefore
poverty reduction or alleviation will be set in motion.
The
strategies for Economic Empowerment as spelt out in the Policy Framework of
February 1998 have land redistribution as a key aspect of the indigenisation
of the economy. The re-distribution of land is a land mark development that
guarantees stability for the future of our country. While it epitomizes the empowerment struggle, it remains a
shining example of real empowerment and indigenisation and a correct basis for
sustainable economic growth with Equity.
It is a giant step towards egalitarianism achieved on the basis of just
and democratic principles. This
is the common struggle and one which we are extremely happy to have
accomplished.
As
I have already said, indigenisation of the economy will succeed in an
environment characterized by economic growth and spearheaded by a vibrant
domestic private sector. To bring
about this macro-economic stability, government has put in place fiscal and
monetary policies that are meant to stimulate productive investment.
The on-going privatisation of state enterprises and the monetary policy
recently announced by the Reserve Bank of Zimbabwe aim at stabilizing the
macro-economic environment and lay the correct and necessary foundation for
indigenisation and empowerment. A
stable macroeconomic environment will yield
Industrialization
in the economy. It is one of the
engines of economic growth as it brings about economic expansion.
A growing economy or increased output leads to more employment and
poverty reduction among most Zimbabweans.
Industrialization
lays a strong foundation for the development of a competitive domestic private
sector and a self-sustaining market economy.
Exports are increased and more foreign currency is realized.
As the economy continues to industrialise the indigenous entrepreneurs
should emerge as significant players in that process.
This can be attained through the establishment of new indigenous
enterprises and new joint ventures, buying of shares in existing
non-indigenous companies, privatisation of state enterprises, takeovers,
subcontracting and outsourcing. The
establishment of new enterprises is emphasized to increase indigenous private
investment in the economy.
Government
will continue to emphasize the speedy
commercialisation and privatisation of state enterprises and the
reduction of consumption expenditure so as to facilitate a reduction in the
budget deficit. Joint ventures
between foreign and indigenous companies are encouraged as a way of mobilizing
foreign investment. It is crucial
that each step taken in this regard contributes to the upliftment and
participatory engagement of the indigenous people.
A
self-sustaining and competitive domestic private sector requires
entrepreneurial skills, technological know-how and economic development
management skills. Skilled
entrepreneurs are required for setting up and running of new enterprises.
Manpower with technological know-how is required for research and
development as well as for manufacturing products in the newly established
enterprises. Our efforts in
vocational training should be geared to produce such cadreship.
As we take stock of progress made to date or lack of it in our quest to
indigenise and empower our people, a number of challenges have however, come
our way.
·
The macro-economic environment has been manipulated
by foreign political and economic influences and this has resulted in high
inflation, serious foreign currency shortages and leakages, the emergence of a
well co-ordinated black market for foreign currency and basic commodities,
smuggling of basic goods to neighbouring countries by individuals and
companies, high speculative activities, politically motivated business
closures and low levels of new productive investment (both domestic and
foreign). This has certainly
retarded the economic empowerment of people and therefore all the current
efforts to remedy the situation are appropriate if not urgent.
·
Lack of collateral security for borrowing by the
majority of aspiring indigenous entrepreneurs has had the effect of a limiting
barrier for new entrants into any new businesses.
This issue continues to pre-occupy us and consultations with all
stakeholders will be engaged in with a view to agreeing on a way forward.
·
Inhibitive legislation governing the entry of
indigenous entrepreneurs into the different sectors of the economy has been
documented and remedial action will be taken soon rather than latter.
·
Over dependence on foreign technology even where
skills and know-how are locally available to create and produce home based
technology has been a challenge calling for re-orientation and serious
campaigns for our entrepreneurs to look inward and be innovative during these
very difficult times.
The
co-operation of both the public and private sectors is critical in the quest
for economic empowerment for the majority of Zimbabweans.
The provision of financial support to indigenous entrepreneurs by
Government is necessary but not sufficient for the economic empowerment of the
majority of Zimbabweans. The Private Sector should therefore complement these efforts.
Only then can we proudly raise our heads and talk of our national
economy. An economy whose
participants include all Zimbabweans and devoid of any social stratification
where to be black is to be poor and hopeless and to be white is to be rich.
Employees
in companies can participate by acquiring shares in the companies they work
for. In an effort to empower a
section of the Zimbabwean people who have not been able to break into the
mainstream economic activities, my Ministry has already requested through
moral suasion, companies to allot 26% of their shareholding to indigenous
Zimbabweans. This motivates
employees as they would appreciate their being integral part of the company.
Government
parastatals now contract indigenous companies for services such as banking,
legal representation, auditing, financial advice, investment broking, estate
management, among others. The
private sector in hereby urged also to subcontract indigenous companies for
the provision of similar services.
Infact, it is incumbent upon the private sector to contribute towards this process, in order that everybody sets involved in the economic empowerment process. It should
In
conclusion, may I take this opportunity to thank you all for your endeavours
in empowering workers and providing support to indigenous companies.
The relationship built between public institutions and the private
sector will go a long way in solving our own economic problems as more of the
indigenous players participate.
I
thank you.