Reservation scheme
Published On October 23, 2015 » 1959 Views» By Davies M.M Chanda » HOME SLIDE SHOW, SHOWCASE
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By Austin Kaluba –
The colonisation by the United Kingdom and other colonial powers of many African countries in the late 1890s and early 1900s resulted in the redistribution of wealth in favour of expatriate classes of the colonised societies whilst marginalising indigenous people.
This was the main bone of contention that spawned nationalist groups bent on attaining political independence to ensure locals were empowered.
However, most former British colonies on the continent did not address this wealth imbalance as the new governments feared being seen as embarking on retribution missions, which would result in the flight of capital needed for economic recovery.
Fortunately a number of countries have subsequently embarked on affirmative action programmes, commonly known as economic empowerment policies, to address the imbalances.
This week Cabinet in Zambia approved the introduction of the reservation scheme under the Citizen Economic Empowerment Act, which would bar foreigners from trading in poultry, quarry, block making and domestic haulage.
Mr Kambwili said any foreigner who would want to trade in these sections should partner with Zambians who must be the major shareholders in the business.
Though the Act is welcome, we feel the Government should do more by extending it to other sectors to ensure Zambians are empowered economically.
Zambia can take a leaf from Botswana’s citizen economic empowerment policy which had its inception in 1999 with limitations of non-citizens from participating in certain economic enterprises.
The policy also put measures to lower costs for citizens to go into business and is embedded in various laws, which were enacted over time to enforce participation by Botswana citizens.
These laws are: the Industrial Development (Amendment) Regulations Act of 2008, which reserves small-scale manufacturing for Botswana citizens or companies wholly owned by Botswana citizens; the Trade Act of 2008, which reserves retail services for entities with less than 100 employees; the Liquor Act of 2003, which reserves liquor bars, night clubs and bottle stores for citizens, and the Public Procurement and Asset Disposal Act of 2001, which gives preferential treatment to Botswana citizens or companies wholly owned by Botswana citizens in state procurement processes.
Joint ventures in the reserved activities are permitted with up to 49 per cent foreign participation, subject to approval by the Minister of Industry and Trade.
The citizen partner holds a minimum of 51per cent shareholding. The Botswana empowerment policy is limited to facilitating access to financial resources and ownership of assets and lacks enforcement to maximise participation of its citizens in economic activities.
In South Africa, the government implemented Black Economic Empowerment (BEE) in 1994 with a view to advance economic transformation in order to enable the participation of previously marginalised communities in the economy, thus changing the racial composition of ownership and management structures and of existing and new enterprises.
However, some empowerment policies should be implemented with caution to avoid counteracting the interests of foreign investors hence, the flow of foreign direct investment (FDI) into African nations.

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