Rumbidzayi Zinyuke Syndication Writer
Zimbabwe’s efforts at redistributing wealth through empowerment schemes has registered various levels of success over the past seven years, raising questions on whether or not it would be prudent for government to revisit the whole process and correct many things that might have gone wrong.
Employee and Community Share Ownership Schemes are critical in ensuring that locals obtain significant benefits from the country’s economic activities under the Indigenisation and Empowerment Act.
The schemes are also envisioned in the Indigenisation and Economic Empowerment (General) Regulations of 2010.
But of the over 100 Employee Share Ownership Trusts (ESOT) that have been approved by government since 2010, probably less than half have been successfully implemented while only 21 of the 61 Community Share Ownership schemes (CSOS) are operational.
Deputy Minister of Youth Development, Indigenisation and Empowerment, Mathias Tongofa, in 2015 said a total of $134 million had been pledged to different community share ownership schemes by qualifying businesses but only $38.3 million had been deposited into their bank accounts. Of this amount, $14,7 million was channelled towards development projects while the remaining $23 million remained banked.
The figures are paltry to say the least.
They barely support the notion that employees and local communities whose natural resources are being exploited, must have a say through guaranteed shareholding in these companies.
But this is not to say that the empowerment drive has been a total waste of time and resources. There are companies that have successfully launched them and made positive changes to the lives of the beneficiaries.
Zimplats is one such company.
The platinum producer ceded 10 percent of its shareholding to the Mhondoro-Ngezi-Chegutu-Zvimba Community Share Ownership Trust and pledged $10 million to help operationalise the trust.
The $10 million was largely invested on the money market and to date, the CSOT has realised more than $2 million return on investment, which has been used to fund community projects.
Earlier this month, the firm also concluded the issuance of a 10 percent stake, valued at US$95 million to its Employee Share Ownership Trust.
Also worthy-noting is Gwanda CSOT, which received shares from Caledonia’s Blanket Mine, Gaths Mine and Pretoria Portland Cement (PPC) since its launch in 2012.
The companies pledged $6,8 million to the trust and reports show that by February last year, the CSOT had spent over $2,5 million on income and developmental projects.
This is what government needs to address if indigenous people are to continue benefiting from economic activities in their communities. —Zimpapers Syndication.