April Fool's Day
I have no idea where the fable comes from, but April the 1st in every year is accepted as 'April Fool's Day' for some reason. We can all expect a newspaper or someone in another media to set up a spoof to try and cause alarm and despondency. This year we know in advance who is going to try this on - it's our very own Minister of Indigenisation, Patrick Zhuwao.
Patrick is a member of the Circus here called the 'G40', otherwise known as the 'Graceland Boys' and I am sure he is meant to be the Clown in this particular troupe. He is in charge of entertaining the kids during this particular show and he does so by trying to terrify the Parents and Adults in the audience.
His portfolio is 'Indigenisation and Empowerment' and he has taken over the administration of the 'Indigenisation Act' which was forced through in 2007 over the objections of the MDC and then given life by one Kasukawere in 2010 by the issuance of regulations that demanded that all firms over a certain size 'Cede' 51 per cent of their shares to 'Indigenous' individuals.
Now I think I know what 'cede' means, but the phrase 'indigenous' is less clear and after some debate it was revealed that it was 'anyone who had been disadvantaged during the era prior to 1980'. In fact it turned out to be persons with a certain pigment in their skin and the Chinese. I could never fathom out just what the Chinese had to do with the matter, for the life of me I still cannot see any connection.
Well, after the initial panic and turbulence the matter died down. Some of the larger companies did 'deals' and clever lawyers made piles of money drafting agreements that in fact left things as they were pretty much. Many adopted the stance that if you want 51 per cent for nothing and you want management control, then take the whole lot and send a cheque to the holiday resort where I am going to retire to, a long way away from Zimbabwe. Others ganged up with the mafia and got 'exemption' in return for hefty payments.
Then came the new Constitution and those pests the Citizens, demanded, quite unreasonably in the view of the owners of the Circus, that all born Zimbabweans and even those that had been here a long time, should be regarded as Citizens. To make matters worse they demanded that discrimination on 'any' grounds be made illegal. This created a vast problem for the Circus management - how to discriminate against these pesky foreigners without violating the Constitution?
After studying their collective navels in the past three years, they finally decided to appoint the resident Clown, Patrick, as their point man on the issue. He, being endowed with less of everything essential to sanity, came out of the side entrance to the ring with both guns blazing. The 51 per cent was going to be enforced for all 'foreign' owned companies and what's more they are going to pay for these shares using their own money. He said that he would impose a levy on all business to pay for the cost of the shares taken over by local 'indigenous' 'investors'. This was going to be self financing because, he famously, announced, the Circus is broke.
Now he has gone one step further, he has announced that on the 1st of April, any foreign owned firms who have not complied with his new dispensations, will be closed down. It is quite impossible for firms still operating in Zimbabwe to pay the so called 'Indigenisation Levy' on gross turnover. It is simply, from a financial point of view, not possible to comply, no matter how hard the Clown shouts from the ring. Secondly, it is quite impossible for the State to demand that anyone give up 51 per cent of their equity for nothing. At full value in the mining industry alone we are looking at $7 to $10 billion - just for publically owned companies.
And so we have a total standoff - of the 18 commercial banks that remain - ten have gone bust in the past five years, 6 are majority foreign owned. Between them they must command 60 per cent of local banking business and have billions of dollars invested in local business. None of them are prepared to go the Patrick Zhuwao way. If they lose their licenses, they will simply close their doors.
On the sidelines, the national regulator of Circuses in Zimbabwe, the IMF, stands on the side of the ring and tries to bring sanity to the farce in the center of the ring. He cries, 'You agreed to modify this thing so that it would be more acceptable to business and investors', 'You cannot do this if you want to keep your license as a Circus', he threatens. In turn the G40 retort, 'If we get our hands on the steering wheel here, it's you (the IMF) who will be thrown out'.
What do we do, people ask me all the time. I reply just ignore the Clown and enjoy the show. There is simply no way that what he proposes can in any way be implemented. If the idiots do win their way and try to enforce this crazy idea on us, it is they who will be thrown out and not the regulator. Then at last we can restore sanity, put the entire Circus out of business and get on with our lives as Citizens in our own country.
Bulawayo, 24th March 2016