Since 1980 when Zimbabwe gained its independence, its politicians and the majority of the population have pressed for substantive indigenous ownership of commerce, industry, mining and other economic sectors. “Indigenous” is defined as any Zimbabwean citizen who has been the victim, or whose ancestors were victims, of discrimination on grounds of race. None can credibly say that there should not be facilitation of significant indigenous economic activity, encompassing a meaningful majority of the populace. The contemptible, unjust and inhuman barriers to the indigenous population during the decades preceding 1980 were highly unjust, and morally wrong. However, on both political and moral grounds, the post-independence governments have progressively pursued economic indigenization, but toward minimal, if any, economic or popular benefit. Instead, for some considerable time, the focus was confined to powerful industrial and commercial enterprises and all too often, the equity that was indigenized was either acquired by government controlled community-service trusts, by the politicians themselves, or by those well-connected to such politicians.

The initial legislation prescribed that not less than 51 percent of the equity of any enterprises with net assets in excess of $500,000 had to be possessed by indigenous Zimbabweans, but subsequently the prescribed net asset base was legislatively reduced to $1, resulting in each business being subject to majority indigenous ownership. Not only was this economically negative, but in many instances there were no assurances that non-indigenous stakeholders forcibly disinvested of their equity would receive fair and reasonable compensation. As a result, the non-indigenous in Zimbabwe and prospective foreign direct investors were put off. This precluded Zimbabwe from achieving its very critical economic recovery and growth. Almost no investor was willing to provide 100 percent of funding, effect technology, trademarks and patents transfers, only to be reduced to minority ownership and become virtually voiceless in the control and management of the enterprises in which they would have invested.

Then, in late 2013, instead of the legislation being confined to specific economic fields, it was extended to include any enterprises whatsoever, including all retail operations, such as grocery stores, laundries, small clothing outlets and the like. However, not only has that indigenization requirement not, as yet, been enforced, but progressively the National Indigenization and Economic Empowerment Board (NIEEB) has granted partial or total exemptions to levels less than 51 percent, and this applies not only to the recent small enterprise legislation, but also to many other enterprises.

While significant exemptions are increasingly common, the influence the government and certain wellconnected individuals carry over the business environment continues to dissuade business-owners and would-be investors. The majority of whole or partial exemptions are granted to ventures that are owned by investors from Asia in general, and China, India, Singapore and Malaysia in particular, motivated by the strong diplomatic relationships between Zimbabwe and those countries.

Although indigenization legislation will remain on the statute books, there are clear indications that much of the content was motivated as a vote-gathering motivator ahead of last year’s presidential and parliamentary elections, with an undisclosed intent that subsequently there would be some revision and easing of the legislation. That is occurring, but only progressively over a period of time, for government is fearful that if it granted all modifications to the legislation in one fell swoop, that would be interpreted by the populace as governmental admission of error. To achieve far ranging, viable, and economically beneficial economic indigenization, the state must abandon its unreasonable, forced provisions, thereby reassuring non-indigenous investors of investment security.

Concurrently, the state must re-establish a medium-tolong- term loan funding facility, providing requisite start-up capital to those of the indigenous population who desire to establish constructive, viable business enterprises, as well as offering tax-based incentives to do so. Fortunately, there are signs that the government is beginning to recognize this need. FDI is a foremost key to Zimbabwean economic wellbeing, and, as the government slowly modifies and adapts its indigenization laws and policies, such investment is likely to be progressively forthcoming, especially so from Asia in light of the sound diplomatic relationship between many Asian countries and Zimbabwe.

(The author is a prominent Zimbabwean economic analyst)