President Robert Mugabe’s nephew Patrick Zhuwao had a stormy start to duty after he was appointed Indigenisation minister in September 2015 as he threatened to close down foreign-owned companies that did not comply with the government’s controversial empowerment laws.
Mugabe had to intervene after Zhuwao threatened banks, sparking a fight with Finance minister Patrick Chinamasa and Reserve Bank governor John Mangudya.
The minister confirmed in an interview with our reporter Blessed Mhlanga (BM) on Friday that it was no longer government policy to close down foreign companies that do not transfer their majority shareholding to locals.
Below are excerpts of the interview.
BM: Mugabe noted in a speech delivered at the official opening of PPC Zimbabwe’s cement milling plant in Msasa that there are a number of companies that are struggling to meet the indigenisation policy. what is your ministry doing about that?
PZ: Well, firstly I think this particular investment where PPC invested $82 million into the plant, is testimony to the fact that indigenisation does not inhibit investment but what indigenisation in effect actually does is to make sure that investment is actually protected and is safe.
Those companies that are failing to meet the policy framework as the president put it politely and very diplomatically, are struggling with indigenisation. They are not struggling with indigenisation, they are struggling with conceptualisation, they are struggling with conceptualising a more certain future for their companies and I really feel sorry for the management and shareholders of those companies because they don’t have the foresight for the future.
BM: You have been militant in the past, threatening to close down non-compliant companies.
PZ: I am an economist. I have looked at the facts and the facts themselves demonstrate that indigenisation does promote investment. it’s not militancy, it’s actually the facts and it’s unfortunate that some of those people have been reluctant to accept the truth.
BM: So are you still sticking with your policy of shutting down companies that have failed to comply as you did in the early days when you were appointed to the ministry?
PZ: What really is going to happen with a lot of those companies that are not innovative enough to recognise the direction the economy is moving towards is they are destined for oblivion, they are dinosaurs.
They will become extinct and the whole concept of indigenisation is not a concept that is peculiar to Zimbabwe, but it’s also a concept that the South Africans are taking on board now when they are talking about economic transformation.
BM: So the market should read that the minister is not going to be forcing any company closures?
PZ: No, no, there is no need for me to threaten ailing and you know blinkered businesses with closure, they are going to really suffer from not being able to recognise what is happening in this economy.
BM: There has been silence from your ministry unlike your early days when you would issue lots of statements on indigenisation. Are you doing any work?
PZ: Yes, yes there has been a lot of silence, because we have now recognised that the future of the Zimbabwean economy lies with the indigenous people of Zimbabwe and to that end what we have been doing is establishing frameworks for us to effectively grow our own economy.
BM: Our own economy means the vending and informal trading we see on the streets of Harare?
PZ: No, no, for example through our youth officers, we have identified over 39 358 young entreprenuers that have created a total of over 93 000 jobs — more jobs than those that have been created by foreign direct investment.
So our focus now is on the real players in the economy, the people that would really determine the future of the economy.
BM: But the Zimbabwe Stock Exchange is suffering, companies are mulling delisting from the bourse, with latest indications showing that Meikles Limited is seeking to delist. There are concerns from economists that you triggered all this with your militancy in the ministry.
PZ: No, it has got a lot to do with companies that have failed to transition from the colonial economy of Rhodesia to the all-inclusive economy of Zimbabwe. You now find that those companies have not been able to recognise the transition that the Zimbabwean economy is going through and as a result, my brother, you are now giving further evidence to my thesis that if you don’t reform and if those companies don’t reform within the context of the changing dynamics of the Zimbabwean economy, they will become extinct and this is what you see with Meikles.
BM: From your explanation, it seems you are prepared to watch the companies die. So forced company closures is no longer on the table?
PZ: We have always tried to educate those that do not see, but to a certain point you would like to say, “look, if they cannot see what can you do, this is a free country, they are free to be blinkered, they are free to be visionless and they are free to actually waste their investors’ resources”.
BM: Some analysts and economists have blamed you for the economic decline in Zimbabwe because during the time you threatened to close down banks and other companies, close to $2 billion in cash was externalised.
PZ: That is nonsensical, it is not correct, that is nonsensical.
BM: How do you say that because around the same time banks ran out of cash and the liquidity crunch hit us hard?
PZ: Those are people who really have no understanding of economics.
BM: If it was not you and your ministry, who was responsible for the chaos in the economy?
PZ: There is a minister responsible for Finance and Economic Development. I am an economist in my own right so I will be able to explain to you what has been happening within the Zimbabwean economy.
But if you look at what the minister of Finance has said and if you look at what the governor of the Reserve Bank has said, they have indicated to you aspects of externalisation.
One of the monetary policy statements that came from the governor indicated a figure of $1,8 billion that was externalised.
If you look at what the minister of Industry and Commerce [Mike Bimha] has done with regards the Statutory instrument 64, it will show you that what we have done as a government is recognise that the future of the economy lies with production within the economy and also, if you look at the most recent figures in terms of trade, the amount of imports have reduced as a result of SI 64.
Now I am expecting you, if you are a good journalist, to report on the facts not on the opinions of clueless nincompoops.
BM: You are now taking advice from the RBZ governor and the Finance minister yet at one point when they warned you against threatening companies with closure, you had a tiff with them?
PZ: No, I never had a tiff, no I never had a tiff with anyone, you can’t put a tiff on me.
BM: But the disagreements are well-documented and were widely reported.
PZ: I work well with the minister of Finance and the RBZ and I want to be able to tell you that the minister of Finance is supporting the establishment of the empowerment and you saw that in his mid-term monetary statement, you saw that in his budget statement, now where are you getting a tiff?
BM: Maybe you have another description for what happened over the interpretation of the Indigenisation Act and your threats to close banks which ended up in you, the Finance minister and the RBZ governor issuing statements that confused the market.
PZ: But what you have my brother is general notice 9 of 2016 which was a result of the work that we were doing together which was issued in January of 2016.
BM: So what happened when you ended up saying you had misinterpreted the law?
PZ: No, no, no, I did not misinterpret the law. At no point did I misinterpret the law. you see, there are these people who want to be able to take out a narrative that Zhuwao misinterpreted the law and yet they cannot cite the section I misinterpreted and how I misinterpreted it. My brother, I interpreted the law properly and accurately.
BM: So why did the president have to jump in and clarify on issues if you were doing just fine?
PZ: His Excellency’s statement was very clear, it said there are various misinterpretations of the indigenisation Act.
BM: These misinterprations were not from you?
PZ: Yes, that was not me, because I know for a fact that there is no section that I misinterpreted, so if you have anything to be able to say Zhuwao misinterpreted this section, please set out the section, otherwise people will just say those things in their dreams.
BM: War veterans have accused you and G40 of being behind the economic meltdown. What is your reaction to that?
PZ: Which war veterans are these? Christopher Mutsvangagwa and Douglas Mahiya … those ones no, no, no, Mutsvangwa!
The way I can respond to Mutsvangwa is by telling you a story of a person who goes to take a bath by the river and while bathing his clothes are stolen by a fool and then he attempts to chase after the fool to get his clothes back while in the nude.
What Mutsvangwa says, I have said already, I have no modus vivendi with Mutsvangwa. I can’t be reacting to Mutsvangwa and Mahiya.
BM: You can’t dismiss a former minister and war veterans. they accuse you of being G40, you and ministers Saviour Kasukuwere and Jonathan Moyo.
PZ: Everybody in Zimbabwe is free to be idiotic, we have a free constitution so it’s within their constitutional right to be nonsensical.