Umzingwane District

D EPIZ
Andrew Sibanda

15 APRIL 2013 VENUE: BRED OFFICES

Presentation Outline
1. Introduction 2. Background of economic empowerment initiatives in Zimbabwe 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 Reality 8. Implementation processes 9. Key Conclusions

Introduction
The Baptist Rural Economic Development Trust commissioned 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

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 order to 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 identify beneficial synergies and opportunities which will maximize the viability and self sustainancy of this centre.
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Program Background
Training Centre /Company Training program Male School of Hospitality and Hotel and catering Tourism Westgate VTC Motor Mechanics 1 6 0 2 2 0 Number of trainees Female 9 0 4 0 0 1 Total 10 6 4 2 2 1

Fingers, Chanes & Hair dressing Stalicholiuos Hair Salons Bulawayo Polytechnic Building

Providence Film and Sound Sound engineering Community development Community development Metro College Bulawayo Polytechnic TM Hyper Bulawayo Polytechnic Total 7/16/2013 Fabric design Till Operation Computer technology

0 0 3

1 1 0

1 1 2 30

(i)

Literature review Design of data collection tools

Methods and Techniques

(i)

(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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Formulation of Empowerment Laws

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The I & EE ACT: 14:33: Key Features

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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Reactions to policy implementation

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 political expediency instead of economic considerations. Implementation viewed as narrowly focused on indigenisation than empowerment, with little strategic efforts towards ensuring BBEE

Urgent requirement for compliance & application of 7/16/2013 strong arm tactics strengthen the political expediency

Policy Implementation: Achievements

100% Compliance by companies mainly in the mining industry. Establishment of community share ownership schemes in areas where mining companies operate total 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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Implementation: What has not worked

Slow down in new foreign direct investments Slow down in Investment inflows

Flight of capital
Increasing difficulties in raising funding for critical projects Challenges of mobilisation of financial resources Violation of BIPPAs Save Valley Conservancy

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Focus on Matebeleland and Midlands 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 7/16/2013 of any one .

Empowerment initiatives in Matland

(1)DIMAF - 80% of the US$40 million fund was allocated to about 17 companies in the region
(2)Land allocations under the land reform program (3)A number of small projects funded under the youth fund

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Empowerment initiatives in Matland

Empowerment Champions
Civil Society organisations
(1)Jairos Jiri Association (2) Binga Craft Centre (3) ORAP (4)Amakhosi Theatre (5)Churches -

Individual Peoples Notable Efforts (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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No Need for Unique Policy: Proposed BBEE Model

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

Reform of State Institutions Local and National Institutions Transparent Indigenisation Processes Privatisation Sector Rules and processes Participati on Access Empowerment level Poor People and their Sector Specific Empowerment Processes Individual & Collective Control BBE Empowerment outcomes

Increased assets and freedom 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

CSOT
ESOT NIEEF Preferential procurement % local ownership (51%)?

Norms And behaviours

Guiding Principles
Information Inclusion/participation Accountability Local organizational capacity

Awareness

Welfare Medium to Longterm

Supportive National context (political, social economic and legal)

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Priority sectors for BBEE targeting

(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.

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Priority sectors for BBEE targeting

(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 related cultural aspects. (v) Vocational Training, skills development, leadership and entrepreneurship: providing accessible, post secondary vocational training and education. (vi) SME/SMMEs: Address key challenges facing SMEs/SMMEs e.g. poor access to finance, weak business structures & systems, marketing constraints, poor capacity for R&D, poorly defined regulatory frameworks networks

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Priority sectors for BBEE targeting

(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 construction services 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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2. Empowerment to mainly based on increasing participation through economic expansion, productive engagement to create more wealth for poverty eradication, 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
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Policy Recommendations

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.

4. The percentage of local shareholding (the 51%) should be the ultimate goal to be achieved in the medium to long term (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
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Policy Recommendations

3. Government should focus on developing the policy and legal 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 earn themselves self-respect and dignity

2.

Government, private sector players and civic society should develop sector specific strategies to be implemented by private sector players on the basis of economic criteria through consultative processes Pace of empowerment to be based on the performance of the economy 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 should be used,

3.

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Strategy Recommendations

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

(4)Civic society efforts to be channelled towards achieving clear policy

(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 of grabbing 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 regions
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Strategy Recommendations

goals set by government and provide information on common indicators by sector

(9)

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Strategy Recommendations

(8) create mandatory sector specific company grading and performance systems as well as systems for objective measurement of performance for those companies that have a desire 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.

(ii) Conduct a capacity audit by sector, and define the existing capacities, identify capacity gaps both at corporate, community and institutional levels (iii)Develop an a result oriented empowerment program through 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 7/16/2013

Implementation process

(i) Identify and characterise the causes of disempowerment or vulnerability of different population groups in their locations

- How can there be better local ownership of national policy on indigenisation and economic empowerment agenda and process? - How can the empowerment agenda be better communicated 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.
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Conclusions

Rather than providing answers, the paper helps crystallise to key questions on the empowerment agenda e.g.

Finally, while there is value and clear benefits in localising national policy, it is important 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 that must lead to real broad based economic empowerment
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CONCLUSION

SIYABONGA
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THANK YOU!