How Africa Can Own Its Resources: The Zimbabwe Example

How Africa Can Own Its Resources: The Zimbabwe Example
Robert Mugabe has shown Africa the way forward

AFRICANGLOBE – There is no doubt that if Zimbabwe succeeds in pushing indigenisation to its logical conclusion, it will have a huge impact on how Africa in general does business with its natural resources in the future. Africa can even rewrite the principles of a world economy that has grown fat on cheap resources sourced from Africa and elsewhere in the developing world.

This makes the former south African president, Thabo Mbeki’s  recent admonition to Africa not to let Zimbabwe fail in the implementation of its indigenisation programme all the more important. Because of the critical place Zimbabwe’s example has for the future of Africa, it is crucial that we quote liberally here from a Mbeki speech given on August 23 2013.

He said: “I think we should ask ourselves the question: Why is Zimbabwe such a major issue for some people? Zimbabwe is a small country by any standard; there is no particular reason why Zimbabwe should be a matter to which The New York Times, the London Guardian and whoever else . . . why are they paying so much attention to Zimbabwe?”

Mbeki answered the question himself by telling a story: “Towards the end of last year (2012),” he said, “they asked me to speak at a conference on Zimbabwe diamonds. So I went, and what surprised me about the conference held at Victoria Falls was that everybody and anybody who has anything to do with diamonds in the world was there. From America, from Israel, from India, from Brussels, everybody. It was not about diamonds in the world, it was about Zimbabwe diamonds. So I was puzzled, saying, but why have they all come?

“Maybe two hours before we left the conference to come back, we sat in a session which was addressed by one of the Indian diamond people. In the course of his presentation, he explained why. He gave an answer to this query in my head. He said in a few years’ time, Zimbabwe would account for 25 percent of world production of diamonds. So I said, ‘I now understand. I understand why everybody is here,”

Mbeki also understands well the resistance from the metropolitan powers when a country like Zimbabwe tries other ways to own its resources. According to him, “powerful players” say openly that the Zimbabweans “have set a bad example (with land reform) which we don’t want anybody else in Africa and the rest of the world to follow. So they must pay a price for setting a bad example.” But bad example for whom? Mbeki responds: “Bad in the instance of the interests of these other people, not bad in terms of the interests of the people of Zimbabwe. So I think this is part of the reason that there is so much attention, globally, on a country in a continent which is actually in itself never mind the diamonds — not particularly important, but it is important because it is setting in the minds of some a bad example which must be defeated.”

Mbeki then came to the crux of the matter, which has so much bearing on how Africa can own its resources: “I am using all of this talk about Zimbabwe,” he said, “as an example about our continent because (with) all of these things I am saying relating to Zimbabwe, you can find the same or similar examples of on the continent, but we are not challenging it as intellectuals. We are not challenging a narrative, a perspective about our continent which is wrong and self-serving in terms of the interests of our people.

“The Zimbabweans are now talking about indigenisation and I can see that there is a big storm brewing about indigenisation. But what is wrong about indigenisation?

What is wrong with saying “Here we are, as Africans, with all our resources, sure we are ready and very willing to interact with the rest of the world about the exploitation of all these resources, but what is the indigenous benefit from the exploitation of this, and even the control.

“You have seen examples of this, all of us have, when Chinese companies, in terms of all this theory about free markets, have sought to acquire US firms and they got prohibited. No, it is indigenisation of US intellectual property. We can’t allow it to be owned by the Chinese, so no.

“So when the Africans say ‘indigenisation’, why is this a strange notion? And yet when we talk about solutions to Africa’s development, one of the issues that we have to address is exactly this indigenisation. How are we utilising our resources to impact positively on African development? I am saying this because I can see that there is a cloud that is building up somewhere on the horizon when Zimbabweans say indigenisation. But we have to, as intellectuals and thought leaders, address that and say: “yes, indeed as Africans we are concerned about our own renaissance, our own development, and we must as indigenous people make sure that we have control of our development, our future, and that includes our resources, and therefore indigenisation’s correct. We must demonstrate it even intellectually, which I am quite sure we can.”  If only Africa could have 100 people with the clarity of Mbeki.

Indigenisation The Answer:

So what is Zimbabwe trying to do? In 2007, President Mugabe, after 27 years in power, suddenly discovered, like the Ghanaian parliament, that the huge natural resources of the country, especially in the mining sector (Zimbabwe is said to be sitting on a “Persian Gulf of strategic minerals of our earth,” in all about 68 known strategic minerals), had been exploited for over a century by foreign owned companies but very little benefit was accruing to the people. It was the classic African conundrum of poverty in the midst of plenty. Mugabe’s answer to this was an indigenisation and economic empowerment policy which Zimbabwe as a country would take an active, as opposed to the hitherto passive, participation in the exploitation of its natural resources. This meant Zimbabwe would now take a joint venture interest in every-none indigenously owned company in the country with a net value of US$1m, by taking 51 percent shareholding in the companies which the “foreign partners” keep 49 percent.

The Zimbabweans have since come up with a radical definition of natural resources,  which include: “(a) The air, soil, waters and mineral resources of Zimbabwe”; (b) “The mammals, birds, fish and other animal life of Zimbabwe” (c) “The trees, grasses, and  other vegetation of Zimbabwe”, (d) “The springs, vleis, sponges, reed beds, marshs, swamps, and public streams of Zimbabwe”, (e) “Any landscape, scenery or site having aesthetic appeal or scene, value or historic or archaeological interest”.
The above resources then become the “Capital” with which the Zimbabwe nation uses to negotiate for the 51 percent shareholding in companies, especially in the mining sector, in which “non-indigenous” (or foreign) investors are interested. Thus, instead of the traditional way of allowing foreign owned companies to exploit the natural resources and pay a royalty to the nation, the Zimbabwean state now takes an active part in the business as a joint partner, in fact the majority-shareholder.

Part Two