Trade and industry are largely conducted on the basis of a free market economy which presupposes free competition

amongst participants in the market with the minimum of State intervention in ,or regulation of the economy .In fact ,the principles of a free market and of active competition which have been described as the lifeblood of commerce are considered as both socially and economically desirable per Van Heerden in his book ,Unlawful competition ,Butterworths ,page 1. Assessment of this statement in the light of the Indigenization Laws of Zimbabwe. By EMMANUEL NHACHI
The indigenisation laws of Zimbabwe are based on the premises of economic empowerment of the previously marginalalised black masses who were refused the opportunity to empower themselves because of the colonial era. In terms of the Indigenisation and Economic Empowerment Act1 (from then on to be called "The Act")

"empowerment" means to the creation of an environment that enhances the performance of the economic activities of indigenous Zimbabweans, into which they would have been introduced through indigenisation. A scrutiny of the indigenisation Act shows that it brings a lot of government intervention in the distribution and management of the market economy. A Free market economy is one which advocates for less government intervention, there is free competition and prices are governed by the principle of supply and demand. In light of the statement in question and depending on the definition of free market given which presupposes free competition and minimal government intervention, an assessment of the Indigenisation Laws of Zimbabwe it is evident that Indigenisation is oxymoronic to the principles of free trade.

A free-market economy is one within which all markets are unregulated by any parties other than market participants. In its purest form, the government plays a neutral role in

its administration and legislation of economic activity, neither limiting it (by regulating industries or protecting them from internal/external market pressures) nor actively promoting it .The theory holds that within an ideal free market, property rights are voluntarily exchanged at a price arranged solely by the mutual consent of sellers and buyers. By definition, buyers and sellers do not coerce each other, in the sense that they obtain each other's property rights without the use of physical force, threat of physical force, or fraud, nor are they coerced by a third party (such as government) and they engage in trade simply because they both consent and believe that what they are getting is worth more than or as much as what they give up. Price is the result of buying and selling decisions en masse as described by the theory of supply and demand 2 .Free-market economics is closely associated with laissez-faire economic philosophy, which advocates confining government intervention in economic matters to regulating against force and fraud among market participants. In the contemporary societies such policies are regarded as the panacea of modern economics.

Regarding the principles of free market given above, Indigenisation is an embarrassment to the quintessences of the principle of Free Market. In the name of redressing the imbalances of the past, the insatiable thirst of economic empowerment programme has gripped our country. This stems of the historical marginalisation and exclusion of Africans in the mainstream economy. This has made our government from the onset of Independence to pour huge amounts of money into the social sphere at the expense of the productive sector, of course this is with the exception of the mismanaged Economic Structural Adjustment Programme. Indigenisation laws are not an exception to this. Looking at the requirements of the law for companies valued over $US500 000 to enter into partnerships with the indigenous Zimbabweans, so they have to cede a significant stake of at least 51% to the Indigenous populace or they will risk losing their businesses 3. The Government also reserved some economic sectors for investment by local Zimbabweans and entry into these sectors requires approval from the Government. The

"Free Market." Rothbard, Murray. The Concise Encyclopedia of Economics

legislation also provides preferential procurement from local companies. From the onset this shows that Indigenisation is contrary to the principles of a free market economy because entices state intervention and regulation in the ceding, procurement and distribution of shares of major players in the Zimbabwean economy. This brings too much state control in trade than that can be afforded by the principles of free trade.

From the definition of "Indigenous Zimbabwean" the Act show that it is contrary to the principles of Free Market economy. The statute states that an Indigenous Zimbabwean is. "any person, who before the 18th of April, 1980, was disadvantaged by unfair discrimination on the grounds of his or her race, and any descendant of such a person, and includes any company, association, syndicate or partnership of which indigenous Zimbabweans form the majority of members or hold the controlling interest."4 This definition implies that the Indigenous people are are black Zimbabweans with Whites, Indians and Coloureds excluded because of their preferential treatment during colonialism. This is incongruent with the declaration of rights in the constitution of Zimbabwe and International human Rights Law. Which advocates for freedom of association and protects citizens from racial discrimination. It amounts to reverse racism, especially to those who settled in Zimbabwe after Independence and established businesses here.and who are we to say that they should carry the burden of empowering Africans.the Act suggest that all Zimbabwean whites and foreigners, regardless of their
backgrounds and benefit or otherwise from past privilege, owe an indeterminate and indefinite debt to black Zimbabweans, simply on account of their race or alien status. A policy with this as its rationale perpetuates the very inequity (unfair discrimination on the basis of race or origin) which is supposedly the raison dtre of the Regulations 5 . Comparing this to the free

competition polices of economics it is evident that Indigenisation can not be in line with Free market Polices.

The Act stipulates that the shares are to be sold at market price, if the company is worth US$500 000 it means a potential buyer of 51% of the shares should have at least US$255 00 and the business acumen required to control a company effectively. The majority of
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Zimbabweans who are said to be the beneficiaries do not have these kind of qualities and so it is purely evident that only the elite Zimbabweans would have a chance. It is also evident that if one has these qualities then it is evident that they have the finance and knowhow to start their own businesses and there is no reason the decent cuckoo-like upon those who have already established their own businesses. And those which such qualities would have already managed to overcome any historical disadvantages in the 30 years since independence, this would only make them richer while the poor remain poorer. This does not make a conducive environment for investment which the country badly needs for economic empowerment. The kind of which free market economies provide.

Another major conflict is that companies do not own those shares prescribed but by the members of the company. The legal right in the shares, and thus the power to treat with the shares lies with those who hold rights in the shares, and not the company (a company is a separate legal entity or person) and it is the one who issued the shares. A company can not compel the transfare of shares by a shareholder.6 Accordingly the regulations seek to have companies do that over which they have no power. And if the regulations were to transfer this obligation to shareholders then the problem becomes of how to determine which share holders are to relinquish the shares to make up the 51%. Furthermore in case of private Companies, by their definition the public may not be invited to buy shares. This shows that our Indigenisation laws does not only violate the principles of free Market but that of the whole economic and legal system.

The indigenisation laws of Zimbabwe are in violation of the Bilateral Investment Promotion & protection Agreements (BIPPA) which protect property from compulsory acquisition and also violate the principle of freedom of contract. The World Trade Organisation principles calls for equal treatment for both foreign and local traders by governments will also be violated. Free trade is associated with well defined, readily enforceable and transferable private property rights which are crucial for economic development; a strong property rights framework underpins all flourishing economies. The transition from extreme poverty to higher levels of income, in countries such as

Botswana, Chile, China, Estonia and India has included the strengthening of the system of private property. The principle of freedom of contract stipulates that a party is free to free to contract with who ever they want and ion whatever terms they agree on so if the government can force a company to enter into agreements to sell shares to a party this undermines the doctrine.

Free market is there to make the economy more prosperous and competitive, to encourage investment and therefore building the economy but our Indigenisation law has the effect of deterring investors therefore crippling the economy. Some private companies only have two directors with individual shares each and the basic premise and essential element for the continued existence of the company is equality between the two shareholders. Such companies also depend on the personal relationship between the partners and the specific expertise they bring to the company. Such companies will not survive a complete take over unless such indigenous blacks have the necessary expertise. Many also who must benefit are considered unfit because of their lack of experience and skills, as a result the elite blacks benefit or he company dies. Then Indigenisation becomes a hinderance rather than a benefit to the economy of Zimbabwe.

Where free market policies make a conducive environment for the promotion of international investment in the country indigenisation proves to the contrary. According to Adam Smith a laissez-faire thinker, international trade without the interference of tarriffs, subsidies, price controls and pork barrel politics is by far the most efficient way of matching global supply to demand while making all the participants more prosperous and that the best indicator of fairness in a broad sense is rising prosperity, the absence of which makes all the benefits of a just and well ordered society so much harder to obtain.7 This kind of free trade invites investors into the country and promotes the growth of the economy. In the same sense no international investors will be willing to take up an indigenisation offer where they will become minority shareholders in their investments (that's a risk one would not usually take). To intensify the problem the Cabinet decision of December 2010 to give the government 100% stake of all alluvial diamonds at Marange
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fields, may sent a bad message and instills fear that if the government can take a 100% on diamonds the next target may be gold, platinum, or the manufacturing sector.

Free market policies are also consistent with free enterprise which is not evident in our country and which is going to be further impeded by the Indigenisation Act. In Zimbabwe the degree to which enterprise will able to flourish and therefore the degree to which the economy as a whole grows depends upon the laws in our country. Good laws such as protection of property rights and enforcement of voluntary, contractual agreements, facilitate the flourishing of enterprise. Bad Laws, such as overbearing regulations and arbitrary or discriminatory enforcement, promote corruption and undermine enterprise. Our laws without indigenisation are confusing, arbitrary and costly; they inhibit business start-ups, repel foreign investments, reduce productivity and depress wages. Then if we add indigenisation to the brew it becomes a fiasco.

The the law is vague and embarrassing on the acquisition of these shares. While some representatives of lobbying organisations such as the Affirmative Action Group have stated that the 51% share or controlling interest will have to be paid for at a fair price, this is not in fact provided for in the Regulations or Act, section 3(b) of the Regulations states the objective that any such business not operating in terms of an approved indigenisation plan after five years must cede 51% of the interest in the business to indigenous Zimbabweans8. In fact, the words sell an buy have been studiously avoided in both the Act and Regulations, leaving the door open for legislation which will provide for the compulsory transfer of shares without payment. This is purely evident to the investors, and notwithstanding our government's reputation, it may be done so. The President himself has drawn parallels between the land policy and the Indigenisation and Empowerment legislation. War veterans have already begun demanding a 20% share in all mining enterprises, in the same manner has they did for land. The land policy had significant negative repercussions on our economy and relations with other nations and the same scenario can not be repeated. Then it will be a fouth Chimurenga and the economy can not be built on such grab and take policies.

Furthermore a company is not a farm whereby the government can replace a white farmer with
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a black farmers and give them subsidies or inputs and assistance and they produce the same outputs as the previous farmer. But it is a complex machinery and it is a finite resource in which its running requires a high level of expertise. Most well established businesses had built a large clientele, well established foreign market and relations which will be jeopardised and will need many more years to achieve. This would cripple the economy and as well as the banking sector which also depends upon these companies and on investor confidence which the regulations seek to shake, to survive.

Free market are socially desirable in the sense that when one, out of merit and innovation seeks to improve himself and achieve his or her goals he would also improve the life of others in the process. Indigenisation is not socially desirable it is just the seduction of the masses by the political leaders. It is a drug used blind the masses with high dosages of nationalistic propaganda by the ruling party to gunner support ahead of the elections. The
Indigenisation and Economic Empowerment Act was passed by Parliament in October, 2007, five months before the harmonised elections of 28th March 2008. Yet it was only assented to by the President and gazetted as law once the peak period of campaigning commenced at the start of the same month. The legislation could have become operational immediately upon gazetting. Instead it was to commence from a date fixed by the President in a statutory instrument. The President then fixed the date as the 17th April, 2008 the day before Independence Day celebrations and the usual accompanying speeches. The date also fell between the first and second round run-off of the Presidential election. It does not thus seem far-fetched to suppose the timing of these successive legislative moves was intended as an election campaign tool by Mugabe and ZANU PF.

It can also be argued that the Act is another kind of empowerment than that of empowering the indigenous Africans. The regulations of the Act are framed in such a way to empower the government with an intimidatory weapon against companies which do not want to comply with their political policies. This is evident in the case of Nestle Zimbabwe 9The very threat of indigenisation has brought a sycophantic response from some businesses, eager to demonstrate political innocuousness and servility and thereby hoping to secure favourable empowerment deals for themselves. It is also arguable that after Mugabe had seen that Land as a means to
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amass wealth for his ZANU PF elite had depleted as a resource he looked at the foreign companies instead.

Moreover the Act can be used by the government to gain control over the business sector. The transfer of 51% of shares from a few hundred non-indigenous companies might appear to empower tens of thousands of new indigenous shareholders. The considerable dilution of shareholdings and dividends will amount for the locals no empowerment at all. But under government instruction a new shareholders voting rights will be used to ensure the appointment of boards of directors of government's choosing. The indirect control of the economy by the government but without many regulations will amount to an artificial free market but the reality would be full control of the market and businesses by the government contrary to the principles of free market.

The limiting of state power especially in the economic superstructure is essential for economic growth but the Act increases state power. Why can not the present government learn from the ancient Munhumutapa Empire which was a confederacy which the elite's power was limited, governance shared and decision making was deliberative and focused on consensus and the state flourished to become the most powerful and richest state in the region. Under the constitution the economic system was open one, citizens enjoyed a high level of free and international trade with the Portuguese, Arabs, Muslims and other distant countries. We can not be overtaken by an ancient Empire to appreciate the benefits of free and Globalised market. It is evident that an open free market system is favourable for the resuscitation of our fallen economy. Not to exacerbate the problem by imposing Indigenisation laws which deter investors and potential investors which the country badly needs at this time. It was better if the period was longer and the process gradual to enable the locals to acquire knowledge and skills and to gain investor confidence, to show that the law is not to their detriment.
The Act and its regulations will prevent the inflow of venture capital and would prevent the recovery of the productive capacity that previously enabled the country to earn the export revenues that are needed to fund and maintain an improving infrastructure. The county's dependable foreign earnings also give it access to credit that supported growing industries, job

creation and training improving social services and further investment inflows, but these has also been compromised by the governments attack on private property.

However one may differ upon the benefits of the free market policies and the overall view on the Indigenisation Act. Free market is critised of it being oppressive and it is also said to promote only the interest of the rich capitalists. Socialist go against the idea because it is said to support imperialism. In as much as one would like to oppose the idea of free market economy is one can not hide from the fact that its pros outweigh the cons. If one has the know how, initiative and also the capital to start a business s/he must not be robbed of the fruits which they gain in doing so. An economy can not be built by grabing from the rich and giving the poor. One must learn to work hard and succeed to get empowered, not to wait for another to work for him and then steal from them. Most white companies were built after independence and some farms were also bought after independence and those people can not be said to have unfairly gained something. This shows that the policy of free market promote a hard working innovative and prosperous economy.

One may raise the point that Indigenisation brings about social justice. This is because the importance of indigenising the economy arises from the need to eliminate the socio-economic development imbalances of the past to create employment and more wealth to eradicate poverty among the majority of Zimbabweans and to expand domestic market. It promotes the basic human right to employment, the right to own property(productive and nonproductive and an adequate standard of living. For such rights to be recognised Zimbabwean people must have equal opportunities and unhindered access to resources and skills leveling the playing field should therefore be made to prepare the way for equal participation in economic development by all Zimbabweans. However this is just but a fantasy judging by the way the indigenisation is being handled in Zimbabwe as mentioned in the essay. Lack of know how and collateral is also a major hinderance factor to the economy of Zimbabwe.

In conclusion, when all has been said and done, the bare truth is that historical injustices and unfairness can not be the bases of our economy. We can not built an economy on policies born out of personal revenge, political inexpediency and chasing away of investors. The path that

this country is taking by first the Land reform program and then indigenisation is not a way to build an economy and it is against free market policies, constitutionalism, rule of law and freedom of contract. Free market policies if not a mixed economy is the way which promotes investments and economic prosperity. One can say withought shame that Indigenisation is againist these principles and no good can arise from it.