Their own piece of pie

Oct 01 2012 14:11
*Malcom Sharara
NO ONE can serve two masters. This of course is part of a Bible verse, Matthew 6:24, which goes on to say, "either he will be devoted to one and despise the other".

This we believe can be easily applied to the situation in most African countries at the moment. If I were to describe it further, I would say Africa is placed between a rock and a hard place.

On the one side we have investors who have the funds and resources to inject into Africa, while on the other side we have "indigenous" people who have waited patiently over the years to benefit and enjoy the resources that lie in abundance in the continent.
Africa is under great pressure at the moment, as it tries to strike a balance between the needs of its indigenous people who are the majority and investors as represented by multinational companies.

Events that have taken place across the continent show that Africans are getting restless with their economic status and believe they should be having a fair share of the African cake. Redistribution of resources and wealth in Africa is an inevitable exercise that leaders can only dismiss at their own peril.

The only question is how best the exercise can be done, and answers to the question must be found sooner rather than later. Delays in formulating a win-win strategy will allow opportunists to take advantage of the situation, resulting in chaos.
Zimbabwe has already gone through one phase of trying to please its “indigenous” people through the land reform programme. The exercise ended up being a chaotic event because opportunists had taken the initiative, only for government to follow suit to save face and - in the case of the ruling party - retain votes.

Had government taken the initiative, the decline in agricultural output would not have been as disastrous as it turned out to be after war veterans forcefully removed farmers from their land.

An orderly redistribution of land would not have resulted in some government ministers ending up with more than one farm. It would have resulted in people getting adequate assistance from government to kickstart their farming activities. Instead of taking 10 years for the country to start seeing the benefits of land reform, it would have taken much shorter.

If done properly, maybe land reform would not have attracted punitive sanctions from Western countries which thought their citizens had been mistreated. Yes, the Western countries would always have reacted angrily - even when it was crystal clear that their citizens had an unfair advantage - but at least Zimbabwe could have avoided sanctions.
Zimbabwe is implementing the second phase of empowerment through the Indigenisation Act. The current programme which is being implemented by Youth, Indigenisation and Empowerment Minister Saviour Kasukuwere may be noble but has also attracted a lot of controversy, with some investors voting with their feet.

The main reason for criticism of the policy is because it is being implemented by a minister from a party known to do things along party lines. Instead of it being labelled a government policy, it is now being associated as a Zanu-PF one.

The Movement for Democratic Change (MDC) formations have not helped things either, as they continuously criticise and contradict the way the policy is being implemented.

Maybe it’s the aggressive nature in which the responsible minister has approached it that is considered wrong, but a closer analysis will show that no bigwigs have benefited so far.

We have heard of employees, management and communities getting shares in mining houses like Zimplats and we believe this is in line with what can be called a broad-based empowerment programme.
A closer analysis will show that the 51% indigenisation policy is actually better than the black economic empowment (BEE) implemented in South Africa. BEE, if I am not mistaken, benefits a few individuals and of course prominent politicians.

The majority of South Africans are still living in abject poverty, especially when it comes to housing and service delivery, but a few individuals - including Julius Malema - are now filthy rich. The South African government has not helped matters either.

Instead of taking the initiative and using taxpayers’ money to improve service delivery, it always waits for things to come to the boil. Hardly a month passes without reading about a South African community that is up in pangas with the authorities as they engage in running battles with the police, demonstrating about lack of service delivery.

The ultimate result is that people will try to vent their frustrations on foreign investors. South Africa is now between a rock and a hard place. Just as it was in Zimbabwe when the ruling government was faced with an election and a landless majority, government ended up taking the side of the war veterans at the expense of the economy.

It is the same in South Africa; the ruling party is faced by restless workers and will have to back those workers to retain votes. President Jacob Zuma has already started supporting the workers. On Wednesday last week he warned mining firms they could lose their licences if they failed to provide decent housing for workers.

Pointing out that the mining industry has assets valued at more than R20 trillion, excluding coal and uranium, Zuma said the sector should be able to pay its workers a better wage. "In fact, it should not be such an industry that has the lowest paid worker, given the wealth they have," he said.
The miners will obviously take this as an endorsement from the president that they must get higher wages. As was the case in Zimbabwe when war veterans forced government to take away the farms, South Africa risks having people like Malema forcing government to nationalise mining houses.

Yes, people are still in denial that what happened in Zimbabwe will not happen in South Africa, but as long as the majority feels economically marginalised a revolution will one day take place. It can be delayed but it will take place.

To avoid the revolution, the South African government must act fast. It should be simple because there is Zimbabwe as a case study. South Africa can avoid going through 10 years of economic decline by correcting and perfecting the way things were done in Zimbabwe.

Land should be redistributed, but in an orderly and productive way. The majority must benefit from the mines, but this must not be done at the expense of the going concern status of these mines.
Zimbabwe had to go through a chaotic land reform programme but things are starting to improve. Even the corporate media which went to town criticising the exercise are now beginning to see the benefits. This July the media published two articles with a more positive view of Zimbabwe’s land redistribution programme.

Lydia Polgreen reported in the July 20 New York Times: “The success of these small-scale farmers has led some experts to reassess the legacy of Zimbabwe’s forced land redistribution, even as they condemn its violence and destruction.”

The Times article still regurgitated claims that widespread corruption within the agrarian programme favoured members of the ruling Zanu-PF ruling party.

Nevertheless, it had to admit upon direct observation that “tens of thousands of people got small farm plots under the land reform, and in recent years many of these new farmers overcame early struggles to fare pretty well.… The result has been a broad, if painful, shift of wealth in agriculture from white commercial growers on huge farms to black farmers on much smaller plots of land.”

Prior to the land redistribution programme the tobacco industry was dominated by fewer than 2 000 white farmers. Today 60 000 farmers, most of whom are African, have raised production levels more than 300% in a four-year period.

South Africa must fare even better, if only its government is proactive and can prevent citizens from taking the law into their own hands.
One thing the South African government must avoid is to create doubt that it is in full control of events in the country. A toxic mix of government stasis and social unrest will  prompt doubts about South Africa's stability in a continent with too many economic scare stories.

Long pent-up anger at the slow pace of economic reform will force militant unions and political populists such as Malema to take advantage and sow discord. Such discord is starting to eat away at investor confidence, and the timing could hardly be worse.

Moody's has already downgraded South Africa, rated at Baa1. Moody's said South Africa's immediate problem is a government that is unwilling and, increasingly, unable to tackle mounting economic problems. If that sentiment takes root South Africa could be in serious trouble very quickly.

Yes, the government is already making efforts to calm investors, but the real issue is not about calming them. It is about making sure that the majority of the populace is happy with the piece of cake that it is getting.

 - Fin24

*Malcom Sharara is Fin24's correspondent in Zimbabwe.

*Follow Fin24 on TwitterFacebookGoogle+ and Pinterest.

zimbabwe  |  land reform



Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
Comments have been closed for this article.

Company Snapshot

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

What’s on your gift list this Christmas?

Previous results · Suggest a vote