There is a lot of foreign direct investment in Zimbabwe as most of you know. What is disturbing though is how you find communities in which these investments are in total disarray. Even in cases where foreign investment is not involved, you can find this happening. A quick example is the takeover of properties by university institutions. I will give an example of Great Zimbabwe University Mashava Campus. Little has been done to improve the local community; in fact, most people have been displaced ever since they took up the Gaths Mine community. Anyways, my point is that most communities are not benefitting as they should in situations regarding investments (local or foreign). In this article, I will discuss why I am saying all this.
Recent Joint Sitting Of Senate Thematic And Parliamentary Portfolio Committees
It emerged that the majority of community share ownerships across the country are now dead. It was pointed out that 21 out of 61 community share ownerships are the only ones functioning. The reason cited for this is that investing companies, particularly in the mining industry no longer play their role. This is all happening due to the repealing of the Indigenisation and Economic Empowerment Act. Of course, this move was done to lure foreign investors but it has created another problem in the process. Here is the issue:
Investing Companies No Longer Bound By Law To Act
When the Indigenisation Act was still binding, it was mandatory for investing companies to contribute to community share ownership trusts. Now that it is repealed, there is no law obligating those companies to do that. In essence, they are not under any legal obligation to support them. So it is obvious that there is a need for a legislative framework to be put in place to ensure all companies in question support the trusts. After all, it is the least any investing company can do in giving back to the community.
Way Forward?
It was resolved by the committee that there was a need to have the Industry Minister appear before the committee. This will be to get a detailed update on the actual progress that has been done. This was not consensual though as the Senator for Harare felt that was not the best way forward. The Senator proposed those operations by investing mining companies be stopped in the meantime. His rationale was that it was inappropriate for them to continue operations yet there is no legal framework in place. It does make sense considering that we do not know how long it is going to take for the legislature to be drafted and enacted.
One of the most successful community share ownership trusts to date is the Mhondoro-Ngezi-Chegutu-Zvimba one by Zimplats. In 2016 alone it earned a return on investment (ROI) of US$1 million. What happened is that Zimplats made a US$10 million commitment to the trust. At some point, it paid part of that amount and the money was invested by the trust. Between 2014 and 2016, the trust then realized a total of US$1.46 million from the investments they made. Success stories like this show us how powerful community share ownership trusts can be.
Going forward, it is imperative that investing companies contribute immensely in developing communities they are operating in. This is especially pertinent when we look at mining companies. There have been way too many cases of communities not benefitting anything from such investments. Ironically, the surrounding communities tend to lose out and can even be worse off than they were before. The necessary legislation needs to be put in place so that communities benefit.
