Chinamasa, Mangudya voices of reason

Obituaries
Indigenisation minister Patrick Zhuwao has been in the limelight lately because of the controversial indigenisation law that he is foisting on an ailing economy against advice from people who know better.

Indigenisation minister Patrick Zhuwao has been in the limelight lately because of the controversial indigenisation law that he is foisting on an ailing economy against advice from people who know better.

Standard Comment

PATRICK-ZHUWAO

President Robert Mugabe’s Cabinet, at the prodding of the youthful minister, set a March 31 deadline for all foreign-owned companies to comply with the law that seeks to force firms to cede 51% of their ownership to locals.

There was shrill noise from Zhuwao last week when some companies ignored the deadline.

The populist law was promulgated in 2008, but previous ministers were reluctant to implement it because of its toxic nature.

Foreign investors, including those from China, have made it clear that the law makes Zimbabwe an unfavourable destination for capital for a number of reasons.

Similar concerns have been raised by international lenders such as the International Monetary Fund, which has been trying to help re-integrate Zimbabwe into the international community after years of isolation.

Finance minister Patrick Chinamasa, since his appointment to head Zimbabwe’s broke Treasury in 2013, has been dealing with such organisations and fully appreciates the concerns of the international community when it comes to the country’s economic environment.

On the other hand, the populist Zhuwao appears not to understand the far-reaching implications of his reckless policy pronouncements.

A case in point is the minister’s careless threats against foreign-owned banks he claims have not complied with the indigenisation law despite assurances by Reserve Bank of Zimbabwe governor John Mangudya that the financial institutions had submitted credible plans.

Zhuwao’s amateurish approach to the issue has the real danger of distabilising the sensitive financial services sector, hence Chinamasa’s intervention yesterday with a statement that set the record straight.

The banking sector by its nature has to be handled with care by the government through proper information management.

Ministers cannot just make pronouncements about the financial services sector driven by emotions or populist consideration, as was the case with Zhuwao in his infantile reaction to Mangudya’s statements.

Chinamasa pretty much repeated what the RBZ governor has said by putting it on record that foreign-owned financial institutions, namely Barclays Banks, Stanbic, Old Mutual and CABS, Standard Chartered Bank, Ecobank, BancABC as well as MBCA Bank, had submitted plans.

Zhuwao must not make the situation even worse for Zimbabwe’s battered economy by making thoughtless statements on issues he does not understand.

The minister has to appreciate that this country is in an unenviable position where it needs foreign investors more than the owners of capital need it.

In other words, Zimbabwe’s economy is not attractive enough for foreign investors to make them ignore the risks of doing business in a badly-governed country like ours.

The government has a responsibility to treat the few foreign investors that remain in the country with respect.

There must be no repeat of the chaos that characterised the land reform programme at the turn of the millennium, if Zimbabwe’s economy is to be salvaged.

In the case of the land reform programme, evil triumphed over good because there were no voices of reason in the Zanu PF government at the time.

It is in that light that we applaud Chinamasa and Mangudya for remaining sober amid the madness.

The two have to contend with a vicious kleptocracy but there is no doubt that they will prevail because theirs is a just cause to protect Zimbabwe’s economic interests.