Zimbabwe’s Indigenisation Act is nothing but a blip on our radars. It was hardly ever enforced even though it was on our books. The law sought to make certain business sectors the preserve of Zimbabweans. Foreigners would not be allowed to open businesses in these sectors. Examples of businesses included mining and hairdressing. Now Zimbabweans are getting a taste of their own medicine as Botswana is in the process of introducing a similar law. If passed it would threaten the livelihoods of a lot of Zimbabweans who are immigrants/foreigners in the country.
The policy is based on two laws, the Industrial Development Act of 2019 and its Regulations of 2020. According to a statement issued by the Botswana Ministry of Investment, Trade and Industry at the beginning of this month, there are about 21 business crafts that will now be reserved for Botswana citizens and closed to foreigners. Any foreigners who venture into these sectors will be prosecuted. Reserved sectors include wholesale retail, filling stations, bread making and furniture.
A lot of Zimbabweans have established businesses in these sectors and are concerned by the new law. It will mean a loss of livelihood in what is now an ironic law. As already mentioned Zimbabwe had a similar law but President Mnangagwa was forced to amend it as it was hurting foreign capital investments. The Zimbabwean version of the law was milder than what Botswana is proposing. The Zimbabwean law did not ban outright participation by foreigners but decreed that such business had to have local majority ownership i.e. at least 51% of the stake in such businesses had to be local.
It was a law that brought much chaos and misery and Botswana is unlikely to witness the same. It will probably not bring the kind of benefits they think it will. Despite widespread complaints about foreigners in such countries, the truth is that those same loathed foreigners are now enmeshed in their economy and have become an integral part of it. They also provide employment and pay taxes either directly or indirectly. Rocking the boat could have disastrous consequences. A lot of economists have already pointed this out. A more sound strategy would be increasing taxes on foreigners in these sectors instead of decimating investments made therein overnight.
Possible unequal enforcement
It will be interesting to see how this law will be enforced. Will, it also be applied to European/Western Foreigners who run businesses in the restricted sectors or will it be just an excuse to target Zimbabweans. South African politicians and their supporters for example have whined about how foreigners take jobs and opportunities from locals. In all cases, they target Zimbabweans and Mozambicans and leave white/Western foreigners alone in their xenophobic waves.