Economic empowerment through indigenisation

By | Business
Zimbabwean currency.Credit@Baynham.Goredema.flickr.com

In the land-locked country of Zimbabwe in Southern Africa, laws regarding indigenisation in foreign companies have brought the country back into the spotlight. Originally coined in 2008 as a method of increasing economic empowerment, the Zimbabwean government proposed foreign businesses change the dynamics of their business by ensuring they employ at least 51% of native Zimbabweans. The aim of the indigenisation law is to provide support measures for the economic empowerment of indigenous Zimbabweans; to provide for the establishment of the National Indigenisation and Economic Empowerment Board and provide for the establishment of the National Indigenisation and Economic Fund amongst other matters. Last week marked the passing of an important finishing date for businesses operating in Zimbabwe to submit their documents in light of the indigenous law.

The indigenisation law was implemented to help indigenous members of the community feel empowered by their work and ensuring employment in international companies employ a balanced amount of local people. This may be all part of President Robert Mugabe’s black empowerment drive, which has previously made headlines due to the nature of his campaign. There may be advantages to the indigenisation law, such as providing the opportunity for native people to enrich themselves and their communities, as well as potentially strengthening the economy of Zimbabwe. Indigenisation may be expressed as a return to African identity as well as the idea of restoring the economic power taken from African people by their colonisers. As a former British colony, Zimbabwe has experienced multiple changes in terms of the government, including becoming independent in the 1980s.

President Robert Mugabe.Credit@Gregg.Carlstrom.flickr.com

President Robert Mugabe.Credit@Gregg.Carlstrom.flickr.com

President Mugabe’s efforts to readdress balance in foreign companies may offer productive aspects and foreign businesses wishing to enter Zimbabwe in the future may have to comply with the indigenisation law in order to operate in the country. Zimbabwe’s government aims are similar to Nigerian indigenisation laws, which were first implemented in 1971. In Nigeria, the indigenisation policy was made to create opportunities for Nigerian indigenous businessmen, to assist in maximising local retention of profits and to raise the level of intermediate capital and goods production. Both policies echo each other in terms of the government’s goals such as enhancing the industrial development of the nation and empowering native people. Like Zimbabwe, Nigeria’s economy continues to change and it is the largest exporter of petroleum in the entire African continent. Most countries may need foreign businesses and capital in order to maintain a stabilised economy, however indigenisation may benefit the local people in Zimbabwe by increasing employment and empowering indigenous communities in industries such as agriculture, fuel retailing among other sectors which may become Zimbabwe companies only.

What other examples are there of countries pursuing indigenisation policies similar to Zimbabwe?

SHARE

Print this articlePrint this article

ARTICLE TAGS

              

COMMENTS

the Jupital welcomes a lively and courteous discussion in the comment section. We refrain from pre-screen comments before they post. Please ensure you are keeping your comments in a positive and uplifted manner. Please note anything you post may be used, along with your name and profile picture, in accordance with our Privacy Policy and the license you have granted pursuant to our Terms of Service.



comments powered by Disqus