The quest for success…
I might one day own shares in foreign-owned companies operating in Zimbabwe.
At least that was the vision I was infected with when I joined a Community Share Ownership Trust.
The government of Zimbabwe, in its great benevolence, launched the community share ownership scheme in 2011 through Statutory 21 of 2010, as a vehicle that would empower its citizens.
This was in support of the Indigenisation and Economic Empowerment Act of 2008, whereby for a foreign-based company to be legible to do business in Zimbabwe, 51% of its shares had to held locally. Foreign-owned entities were hitherto obligated to dispose 51% stake to locals and at least 10% of this equity was to be spared for the local community in which the firm operated.
Community Share Ownership Trusts would be the investment vehicle through which shares would be acquired and manage funds on behalf of the local community members. Several Trusts popped up in mining regions with locals set to benefit from the Transnational mining operations in their regions.
The details of these Trusts were somewhat veiled in secrecy with details of how they were supposed to operate never made publically and it would not be a surprise to find the locals telling you they had never heard of the trust that they were supposed to be benefiting from in their area..
On this backdrop, I received an invitation to join a Community Share Ownership Trust that was geared for the urban youth and students as the majority of trusts served mining communities. The guys made a compelling pitch about how as an individual one could not simply walk into the offices of a Multi-national firm and ask if they were compliant with the Indigenisation and Empowerment Act and request to see their share distribution structures, but The Trust could.
The founders of The Trust wanted us to sign up en masse because they claimed that the more people who were represented by The Trust, the more negotiating power The Trust would have in leveraging for shares. A recruitment drive was launched where you would get points which would translate into the percentage of the shares you would own for every person you recruited to sign up with the trust…
And of course there was a little thing about subscription fees of $10
Actually, they weren’t subscription as The Trust’s legal counsel had gone to great pains to explain to us. The $10 was a donation to The Trust and as such would not entail any legal obligations or scrutiny as would had they said the money is subscriptions….
“What if you just take our money and run?” A fast thinking observer had asked.
In repsonse, one of The Trust’s founders had delivered an impassioned speech on how he had
been deported returned from the United Kingdom with absolutely nothing but $10 000 and a dream and look at him now; he ran a very lucrative Multimedia Advertising Agency. He stressed that to be successful in business you have to be willing to take risks he had risked $10 000, if we weren’t ready to risk a $10 investment, we weren’t ready for the big league and owning shares…
Of course I signed up and paid my donations then enlisted friends and peers to join up; I even paid the subscriptions for some of my sceptical friends, who were clearly not ready for the big league, knowing I would be collecting with interest; when the share dividends started paying out, I would be top of the pyramid….
We had weekly update meetings and somehow I had landed a role in The Trust’s committee, I was moving up in the
pyramid world, Mr Soon To be Shareholder. Membership reached the thousands. To have time to prepare for the rising numbers, meetings had to shift to fortnightly and then monthly and then to be advised…. And then here we are, still waiting.
In August 2019 government announced intentions to repeal the Indigenisation and Economic Empowerment Act in a move to attract foreign direct investment (FDI) because frankly what investor would want to operate under such a restrictive policy. The Act would be replaced by more “business-friendly” Economic Empowerment Act in line with the Zimbabwe Is Open For Business mantra.
Effectively Community Share Ownership Schemes have been rendered dysfunctional as industry is not legally compelled to support local community; out of a possible 61 community ownerships trust that were registered, to date only 21 have a semblance of functionality.
Oh, the shares I could have owned…