Zimbabwe PM Says 'Warped' Indigenization Drive Discouraging Investment
Economists said Zimbabwe's indigenization program is flawed because there is not enough capital in the country to buy equity stakes
Briefing journalists about his recent US trip to woo capital, Prime Minister Tsvangirai said the message he received was that indigenization has created great uncertainty among international investors Prime Minister Morgan Tsvangirai said Wednesday that Zimbabwe’s “warped” indigenization program as well as “toxic politics” are driving away investors whose capital is desperately needed to revive economic growth after a decade of steep decline. Briefing journalists about his recent trip to the United States to woo investors, the prime minister said the message he heard was that the indigenization program has created great uncertainty among international business people. He said the program's chaotic implementation is tarnishing Zimbabwe’s image. He said the policy, still not overhauled by Parliament, has caused him headaches. His spokesman Luke Tamborinyoka told VOA reporter Blessing Zulu that the program is discouraging essential inflows of capital that the country requires. Meanwhile, following Tuesday’s announcement by the Indigenization Board that more than 700 firms have not filed plans explaining how they will put a controlling equity stake in the hands of black investors, economists said the program should be abandoned. The economists said local investors do not have the capital to take such large equity stakes, and noted that few Zimbabweans have experience in financial markets. They said Zimbabweans struggling to make ends meet barely have enough cash to buy food and other necessities, let alone purchase equity stakes in foreign firms. Economist John Robertson, calling the program a non-starter, said Zimbabwe should abandon it. “The program is a huge absurdity and I don’t believe we should make any attempts to make it work,” Robertson declared. Economic commentator Masimba Kuchera said Zimbabweans will not benefit from the program as there is no popular investment culture among most indigenous people. Parliamentary Mines Committee member Moses Mare said there are serious inconsistencies in the proposed implementation of the program.