The road to indigenisation and economic empowerment

The road to indigenisation and economic empowerment

An unnecessary panic alarm, maliciously intended to scare away potential investors, has been sounded following government’s indigenisation and economic empowerment bill, which would require white-owned businesses to sell 25% ownership to “Previously Disadvantaged Peoples (PDPs)”.

Once enacted, the New Equitable Economic Empowerment Bill would also require all white-owned businesses to cede at least 50% of management positions to PDPs. The bill also prohibits white males from selling such ownership to their white wives, regardless of whether they are PDPs or not. One wonders what the fuss is all about.

Indigenisation has become a preferred strategy for reconstructing post-colonial states in Africa. The belief is that there is a need for residual dominance of settler populations, particularly in southern Africa, by means of developmental and cultural policies deemed necessary to restore sovereignty to Africans. Every state in the world cherishes and proudly defends its sovereignty, or at least should be seen to do so.



The never changing nature of history is that it repeats itself constantly and with each cycle new lessons are learned and past mistakes are corrected. Economic empowerment policies, whether enforced by a colonial, imperial or democratically elected government, embody such cycles and lessons.

The key issue raised by independent states at the time of their independence – whether in Africa, Europe, Asia or Latin America – has always been state participation in the economy, also known as indigenisation, or economic empowerment.

Today’s industrialised nations went through the same process and built gigantic conglomerates within their borders that are held accountable for having been bequeathed with economic empowerment in their nascent stages.

No legitimate government has ever apologised for making such policies and expecting Namibia to do so is hypocritical and laughable.
Economic empowerment comes in many forms. It can be an obligation ensuring that private companies should reserve a shareholding to public entities at the creation of such private companies. State participation may also be decided at a later stage in the form of nationalisation, giving the right to indemnities.

The purpose of economic empowerment is to restore economic power to sections of the population that social stratification and discrimination processes had previously excluded from decision-making, based on race, gender, etc.

It has the potential to increase local participation in or ownership of established businesses. The major challenge in this process is ensuring fairness, transparency and equitable access to, and participation in economic empowerment; and to hold to account those entrusted to oversee the process and the beneficiaries.

The common challenge is associated with empowering unskilled individuals with no experience to successfully meet the economic challenges of the modern world. Zairisation and Ivorisation policies restored economic power to the citizens of the DRC and Ivory Coast.

Those policies gave birth to huge state-owned companies, in all sectors, including agriculture, industry and services. The policies were good, but were poorly planned and implemented. This resulted in continuous restructuring, liquidation and privatisation. Poorly planned policies have the potential to fail dismally.

Indigenisation and economic empowerment policies have not been common in north, central and west Africa. However, they have become a trend in southern and eastern Africa, where colonial influences and Anglo-Saxon and Lusophone heritage remain common features, as does the fact that colonisation lasted far longer in these regions than elsewhere on the continent.

At the attainment of independence, these states faced severe and potentially destabilising disparities of wealth and resources between the rich and the poor and between the settlers and the indigenous population.

These phenomena arose from the legacy of contested and uneven transitions to independence. The manner in which post-colonial governments framed policies around the “settler problem” is crucial for understanding post-colonial politics.

The overarching need to anchor policy in socially acceptable indigenous contexts has become a prominent feature of post-colonial politics and is indicative of an indigenous turn in southern African politics.

Botswana is an exception in the region, as the government pro-actively encourages citizen-owned businesses and entrepreneurs. Certain categories of tenders are restricted to citizen-owned companies only and citizen-owned or majority citizen-owned companies enjoy preference during tender evaluations.

Certain manufacturing activities are also restricted to citizens and citizen-owned companies. The government has set up the Citizen Entrepreneurial Development Agency to provide fledgling citizen-based companies with technical, financial and managerial assistance. And yet there is no hullabaloo.

It is with this view in mind that Namibia’s New Equitable Economic Empowerment Framework (NEEEF) deserves support. It is without doubt that the five pillars of this transformational policy formulation, namely ownership, management, control and employment equity, human resources and skills development, entrepreneurship development and community investment, provide a firm foundation for indigenisation and economic empowerment.

Our watchwords should at all times be: accountable, efficient and transparent.
* Dr Charles Mubita holds a PhD in International Relations from the University of Southern California.

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