Striving for Broad Based Economic Empowerment in Zw

7/28/2019 Striving for Broad Based Economic Empowerment in Zw

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Umzingwane District

Andrew Sibanda

15 APRIL 2013

VENUE: BRED OFFICES

DEPIZ


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Presentation Outline1. Introduction

2. Background of economic empowerment initiatives inZimbabwe

3. Formulation of the policy and legal framework of

indigenisation and economic empowerment

4. Policy implementation

5. Empowerment experiences : What has not worked

6. Focus on Matebeleland and Midlands Provinces

7. Recommendations: Making Empowerment a Reality8. Implementation processes

9. Key Conclusions


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Introduction

The Baptist Rural Economic Development Trustcommissioned a study to assess viable business

opportunities in it operational areas of

Umzingwane district namely Mawabeni,Matshetshe, Mtshede, and Esikhoveni. The

study was commissioned for the purpose of

providing vital information on the organisations

enterprise development program


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Objectives of the Study

1.Purpose of the Study

The purpose of the study is to identify and analyse

viable business opportunities around Mawabeni,

Matshetshe, Mtshede, and Esikhoveni areas in orderto advise trainee entrepreneurs on which

opportunities offer the best chances for establishing a

successful enterprise.


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Objectives of the Study

2. Specific Objectives

1. To Identify viable business opportunities in

Mawabeni, Matshetshe, Mtshede, and Esikhoveni.

2. BRED will soon be opening a youth Development

centre at Mawabeni Baptist Church offering various

business services. They consultant should identifybeneficial synergies and opportunities which will

maximize the viability and self sustainancy of this

centre.


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Program BackgroundTraining Centre /Company Training program Number of trainees

Male Female Total

School of Hospitality and

Tourism

Hotel and catering 1 9 10

Westgate VTC Motor Mechanics 6 0 6

Fingers, Chanes &

Stalicholiuos Hair Salons

Hair dressing 0 4 4

Bulawayo Polytechnic Building 2 0 2

Providence Film and Sound Sound engineering 2 0 2

Community development

Metro College

Community development 0 1 1

Bulawayo Polytechnic Fabric design 0 1 1

TM Hyper Till Operation 0 1 1

Bulawayo Polytechnic Computer technology 3 0 2

Total 30

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MethodsandTechniqu

es

(i) Literature review

(i) Design of data collection tools

(ii) Enumerator training

(iii) Mobilisation of participants

(iv) Focus Group Discussions

(v) Key informant interviews

(vi) Assessment of existing business

(vii) Data analysis and report writing

(viii) Analytical frameworks


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F

ormulationofEmp

owermen

tLaws


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TheI&EE

ACT:14:3

3:KeyFeatures

Outlines the objectives of broad based

economic empowerment

Provides the institutional framework for

indigenisation and EE

Provides legal instruments for I&EE (General

regulations (2010) and general notices)


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R

eactionstopolicyimplementation

There is consensus on need for policy, but differences

on strategy, pace and focus

Implementation continues despite discord &disagreement in Incl. Gvt PLC issued an adverse

report on Gen. regulations & gen. notice 114/2011

-Thus widely viewed as partisan & driven by politicalexpediency instead of economic considerations.

Implementation viewed as narrowly focused on

indigenisation than empowerment, with little strategicefforts towards ensuring BBEE

Urgent requirement for compliance & application of

strong arm tactics strengthen the political expediency


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Policy Implementation: Achievements

100% Compliance by companies mainly in the mining

industry.

Establishment of community share ownership

schemes in areas where mining companies operatetotal capital of US$114 million injected.

Establishment of employee share ownership

schemes: 400 ESOTs created by November 2012.

Establishment of the youth fund - US$10 million


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Im

plementa

tion:Whathasnot

worked Slow down in new foreign direct investments

Slow down in Investment inflows

Flight of capital

Increasing difficulties in raising funding forcritical projects

Challenges of mobilisation of financialresources

Violation of BIPPAs Save Valley Conservancy


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FocusonMatebelelanda

ndMidlands

Provinces Problem underpinning empowerment

Implementation I & EE seems uniform nationwide e.g.

CSOTs, ESOTs, though the Youth Fund is seen as

generally unreachable.

BUT: There an enduring perception that Matland and

Midlands are marginalized.

Perceptions of regional Economic status- Marginalisation

- Lack of initiative by people in Matebeleland

- Poor representation by elected leaderships

- Failure to take advantage of available resources

- Reality : economic stagnation in the regions. This may

be a result of a combination of factors than the result

of any one .


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Em

powerm

entinitiativesinMatland

(1)DIMAF - 80% of the US$40 million fund

was allocated to about 17 companies inthe region

(2)Land allocations under the land reformprogram

(3)A number of small projects fundedunder the youth fund


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Em

powerm

entinitiativesinMatland

Empowerment ChampionsCivil Society organisations(1)Jairos Jiri Association

(2) Binga Craft Centre(3) ORAP

(4)Amakhosi Theatre

(5)Churches -

IndividualPeoplesNotableEfforts

(1)Delma Lupepe Industry and Commerce

(2)Peter Ndlovu Soccer and talent development

(3) Raj Modi Commerce(4)Brenner Bulawayo Abattoirs


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ProposedB

BEEModel

No Need for Unique Policy:There is no need for a separate policy

framework or different empowerment

approach, but, existing policy should be

localised, fairly implemented, giving equal

importance to ALL regions.

Key Elements of the BBEE Model

(i) Access to Information: Information is power.

(ii)Inclusion and Participation(iii)Accountability

(iv)Local Organizational Capacity


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Proposed Broad Based Economic Empowerment Model

BBE Empowerment outcomesIncreased assets andfreedom of choice

Strengthened poor peoples

organizations

Improved governance and

access to justice

Functioning and more inclusive

basic services

More equitable access to

markets and business services

Strengthened civil society

Improved participation in

national issues

Reform of State Institutions Local and National Poor People and their

Institutions

Sector Rules

and

processes

Norms

And

behaviours

Transparent Indigenisation

ProcessesPrivatisation

CSOT

ESOT

NIEEF

Preferential procurement

% local ownership (51%)?

Guiding Principles

Information

Inclusion/participation

Accountability

Local organizational capacity

Sector Specific Empowerment

Processes

Individual & Collective

Supportive National context (political, social economic andlegal)

Control

Participati

onAccess

Awareness

Welfare

E

mpowermentlevel

Medium to Long-

term


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Priorityse

ctorsfor

BBEEtarg

eting

(i) Land ownership and control: address leases and title deeds

include communal lands and protected lands - national parks.

(ii) Agriculture: generally focus on improving infrastructure,

farming machinery & equipment, production technologies

including seed technologies, agricultural training, and market

development- Livestock commercialization,

- Cropping: irrigation development.

(iii) Tourism and hospitality sector: focus on giving communities

and businesses access to the resources to run the tourism in

the forest areas and national parks. Develop local Tourism.

( ) d l b d


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Prioritysectorsfor

BBEEtarg

eting

(iv) Arts entertainment and culture based enterprises:

develop the arts to professional level, with deliberate

promotion of the various types of art including theatre,

visual arts, music, film production, crafts, and relatedcultural aspects.

(v) Vocational Training, skills development, leadership

and entrepreneurship: providing accessible, postsecondary vocational training and education.

(vi) SME/SMMEs: Address key challenges facing

SMEs/SMMEs e.g. poor access to finance, weakbusiness structures & systems, marketing constraints,

poor capacity for R&D, poorly defined regulatory

frameworks networks

( ii) Mi i F ll di l i i i


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Pr

ioritysec

torsfor

BBEEtar

geting

(vii) Mining: Focus on small to medium scale mining operations

addressing Skills training, Acquisition of equipment,

Strengthening small miners institutions for better collaboration,

Establishment of strategic mentoring relationships with large

scale mining concerns

(viii) Construction and related industries: Focus on

manufacturing of building materials such as bricks offers

important services. There is a huge market for constructionservices especially due to the shortage of housing in urban areas

as well as peri-urban areas

(ix) Banking and financial services: Improved access to financial

services

(x) ICTs: improve access and affordability , Improvement of TV

and radio coverage:


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1. Broadly define empowerment to enable policy to be

inclusive, & define the term as a goal, & as a process,

stating SMART objectives, indicators & measurement

criteria.

2. Empowerment to mainly based on increasing

participation through economic expansion, productive

engagement to create more wealth for povertyeradication, rather than redistributing the existing

limited wealth.

3. Emphasise development of a broad-based domestic pvt

sector through innovative transformation of existing

opportunities into enterprises to become the engine of

growth & source of national pride PolicyRecommendations


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3. Government should focus on developing the policy andlegal framework, guidelines and standards, that guarantee

pre-conditions necessary for successful economic

empowerment & allow ALL Zimbabweans to participate in

the economic development of their country and earnthemselves self-respect and dignity

4. The percentage of local shareholding (the 51%) should be

the ultimate goal to be achieved in the medium to longterm (e.g. 30 years) with options for lower local

shareholding levels in the short to medium term

5. Empowerment policy to deliberately include instruments

that allow for decentralisation of empowerment activities

to relevant sectors and allow significant private sector

involvement in the design of sector strategies and targets

that allow for sustainable growth and higher success rates

Policy

Recommendations


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1. Institutional changes to include private sector players in the form of

representative bodies. Govt then becomes policy maker and

supervisor rather than sole implementer

2. Government, private sector players and civic society shoulddevelop sector specific strategies to be implemented by private

sector players on the basis of economic criteria through

consultative processes

3. Pace of empowerment to be based on the performance of theeconomy i.e. context specific rather than based on political

considerations only. The current economic context seeks to attract

foreign direct investment, therefore, empowerment considerations

should not be seen as obstacles, but stepping stones that investors

should seek to adopt. Creative incentives for indigenisation shouldbe used,

Strateg

yRecom

mendat

ions

(4)Ci i i t ff t t b h ll d t d hi i l li


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(4)Civic society efforts to be channelled towards achieving clear policygoals set by government and provide information on common

indicators by sector

(5) For empowerment to be successful, there is a need to provide

government backed financial instruments with appropriate pay back

periods, reasonable interest rate regimes and rules of access

(requirements, e.g. collateral security).

(6) Capacity building of entrepreneurs should form the basis of all

empowerment initiatives. There is a need to avoid the culture ofgrabbing as a strategy of indigenisation and empowerment. This

approach violates international statutes and key principles of

sustainable growth, while at the same time giving perceptions of

repulsive lawlessness.

(7) preferential procurement should be broad based through making

sure that the government tender system adopts a geographic area

specificity and use the point scoring system in order to ensure

equitable distribution of opportunities across regionsStrategyRecom

mendations

(8) t d t t ifi


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(8) create mandatory sector specific company

grading and performance systems as well as

systems for objective measurement of

performance for those companies that have adesire to participate in indigenisation and

empowerment programs. These should then be

used in the awarding of work to appropriate

companies that have the required capacity,equipment, and experience to deliver to required

standards.

(9)

StrategyRecom

mendat

ions

(i) Identify and characterise the causes of disempowerment


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(i) Identify and characterise the causes of disempowerment

or vulnerability of different population groups in their

locations

(ii) Conduct a capacity audit by sector, and define theexisting capacities, identify capacity gaps both at

corporate, community and institutional levels

(iii)Develop an a result oriented empowerment programthrough inclusiveness democratic processes of

participation. The program should define SMART sector

specific objectives and strategies based on sector

approach with sensitivity to regional variations. Short,

medium and long term results should be defined in their

result chains at output, outcome and impact levels.

(iv)Identify and select performance indicators (at output,

outcome, and impact levels) against which

Implem

entationproc

ess

R th th idi th h l


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Rather than providing answers, the paper helps

crystallise to key questions on the empowerment

agenda e.g.

- How can there be better local ownership of

national policy on indigenisation and economic

empowerment agenda and process?

- How can the empowerment agenda be bettercommunicated and used for the benefit of all?

- What are the different tools available for policy

localisation, and what are implications for current

practice.-What should be the roles of government, local

government, civil society and the private sector. Con

clusions


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Finally, while there is value and clear

benefits in localising national policy, it isimportant to note that, on its own

localisation is not a panacea to economic

empowerment. There are a number of

factors that determine the successful

implementation of localised policy. Policy

localisation therefore, is not an end in itself,

but, the beginning of work processes thatmust lead to real broad based economic

empowerment

CONCLU

SION


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SIYABONGA

HA

NK

YOU!

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Striving for Broad Based Economic Empowerment in Zw

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