Can Zimbabwe offer any lessons?

Zimbabwe is still in economic doldrums under the loose moribund political-power sharing arrangement.

Last week, the Zimbabwean Herald Business Daily ran a headline that caught my eye, “Indigenisation regulations gazetted. ”

The government has gazetted the Indigenisation and Economic Empowerment Regulations 2010.

The regulations are meant to achieve 51 per cent indigenous shareholding in existing businesses with owners given a five- year period to comply.

The regulations require that all existing businesses with a threshold of US$ 500,000 should within 45 days from March 1 2010 declare their shareholding status.

This is likely to be interpreted as a way of chasing away foreign investors while other people feel it is tantamount to nationalisation or expropriation of foreign businesses.

Analysts view it as a retrogressive piece of legislation that will only contribute to the ever deteriorating political risk profile.

By and large, political risk refers to the complications businesses and governments may face as a result of what are commonly referred to as political decisions that have a probability of affecting business objectives.

This decision is bound to raise eye brows and indeed make potential foreign investors shy off.

The law is an equivalent of a legalised expropriation of assets owned by private interests since it compels that all businesses and companies cede 51 per cent shareholding to indigenous black interests.

Indeed forceful redistribution of wealth may not be the sure panacea to the problem of empowering the black indigenous people.

Entrepreneurship spans beyond getting the wealth.

For companies, manufacturing entities or factories to flourish there must be proper allocation of scarce resources that the locals may not effectively offer.

Contrary to my expectations, this country is full of resources and the infrastructure especially in the city of Harare puts Kenya to shame.

The gold, diamond and platinum mining significantly contribute to this economy.