World Bank Worried About 'Ghost Workers'

Insiders said the “ghost workers” could “conservatively” amount to more than 160 000 who daily mill around government offices selling various trinkets and food stuffs in corridors, while some are actually dead.

Kundhavi Kadiresan, World Bank Country Director responsible for Malawi, Zambia and Zimbabwe said: “We (The World Bank) have been holding discussions with ministers in charge of the economy and what is being done about the alleged thousands of ghost workers who are still being paid by government.

“We asked the Government of Zimbabwe to tell us what they are doing about this issue.”

She said her “World Bank Team” in Harare also discussed Zimbabwe’s stance on the new Indigenisation and Economic Empowerment regulations that have caused headaches for the business community especially the banking and mining sectors.

Both sectors have said the new regulations will stifle much-needed investment and seriously affect the nation’s liquidity increasing further its economic malaise.

The Minister of Indigenisation and Employment Creation, Saviour Kasukuwere, has threatened major commercial banking institutions including Barclays Bank Zimbabwe Limited (Barclays), which is listed on the Zimbabwe Stock Exchange (ZSE), and Standard Chartered Bank Zimbabwe Limited (Stanchart) as well as major mining firms such as Anglo American Corporation Limited and Impala Platinum Mines that he would take away their operating licences if they did not play ball and co-operate with government.

The new regulations stipulate that locals must own at least 51 percent of any firm that has a turnover of at least US$1 million in Zimbabwe today.

“We discussed the new regulations on indigenisation as well as the banking and liquidity issues,” Kadiresan said in Harare.

“We also discussed several issues with the Minister of Finance, Tendai Biti, about issues dealing with the country’s economy and the way forward. Zimbabwe has a liquidity problem and we also discussed this with the ministers.”

She said the World Bank Team had also discussed government’s debt reconciliation programme.

“There is a lot of potential in Zimbabwe,” she said.

“You have a very high growth rate of about 9 percent, low inflation of about three percent, and are showing strong signs of stability. Zimbabwe’s potential is enormous.”

The very influential World Bank says while it strongly supports indigenisation of African economies, Zimbabwe’s latest regulations are “unclear” and have resulted in major investors sitting on the fence.

“The cost of doing business in Zimbabwe is very high and the investment climate is still not conducive,” Kundhavi Kadiresan, Country Director for Malawi, Zambia and Zimbabwe said in Harare after visiting several financial institutions and meeting senior ministers whose ministries deal with economic issues.

“Since there is no clarity on issues many investors are sitting on the fence. We (World Bank) are looking carefully at your indigenisation and economic empowerment regulations and how they will affect your economy.”

Kasukuwere has given the Western business community a tongue-lashing accusing it of “reaping where it has not sown” by grabbing all “profits” and taking them to their capitals in London (United Kingdom), Paris (France) and Washington D.C (United States).

His new regulations on indigenisation have riled even local business tycoons especially those in the mining sector who point out that Zimbabwe does not need such “draconian” regulations coming at a time when the country is seriously in the red and does not have sufficient balance of payments support from the international community.

Under the new indigenisation and economic empowerment regulations, Zimbabweans must earn at least 51 percent of any firm taking home US$1 million in turnover.

In an exclusive interview with Radio VOP, business mogul and prominent banker, James Mushore, Chief Executive of NMBZ Holdings Limited (NMBZ), said Zimbabwe’s indigenisation regulations were “unclear” and “opaque”.

NMBZ is dually listed on the Zimbabwe and London Stock Exchanges.

It is currently the only indigenous commercial services group to achieve this feat.

“Zimbabwe’s economy is agricultural-based,” Mushore told Radio VOP.

“Agriculture used to provide 65 percent of inputs into manufacturing. It follows, therefore, that to create employment we need to fund agriculture which will lead to a resurrection in manufacturing.

“To fund agriculture we need access to lines of credit which will allow us to advance loans of 270 days or more as this is the typical see to harvest period.”

He revealed that NMBZ was currently seeking US$10 in lines of credit for this from the international community.

Commenting on the indigenisation regulations that have apparently riled his colleagues in the financial services sector, Mushore said: “To access lines of credit we need to be able to get lenders to reassess their views on what they perceive to be political risk in Zimbabwe.

“We can do this in a number of ways – one of which is to have legislation that is clear. We all want indigenisation but the perception out there is that our indigenisation laws are opaque and capable of many interpretations and, therefore, manipulation. Investors thrive on certainty. Our empowerment and indigenisation laws need to be crafted in a way that is clear and unambiguous.”

The Chamber of Mines of Zimbabwe (COMZ), currently being led by Gapare as President, has told government that 25 percent and not 51 percent could be used for the economic empowerment purposes.

But this suggestion was rejected by Minister Kasukuwere.

The World Bank’s Kadiresan said: “Zimbabwe has a fragile policy environment. The World Bank is working on trying to improve the country’s business environment.

“The political economy must be improved. This should be underpinned by the Global Political Agreement (GPA) with SADC support.

“The Bank is contributing by sharing best global practices in critical issues affecting the business environment, especially property rights in the context of agrarian reforms and economic empowerment.”