Towards Legal Empowerment of Community Share Ownership Trusts in Zimbabwe: Policy Brief No.2 2021

By 13 September 2021Democracy, Legislation

This policy brief explores issues relating to community share ownership trusts and analyses relevant legislation. Read on to get more on this.

In 2010, the Government of Zimbabwe adopted a watershed economic empowerment policy reform, introducing a variety of schemes that shared economic benefits between private sector companies and communities. Through the Statutory Instrument 116 of 2010 the Indigenisation and Economic Empowerment (General) (Amendment) Regulations, 2010 (No. 2), three types of share ownership schemes were introduced. These are; the Employee Share Ownership Scheme, the Management Share Ownership Scheme and the Community Share Ownership Scheme. The schemes were part of an assortment of vehicles for achieving the government’s indigenisation policy, which required that all businesses should have fifty-one percent (51%) of their shareholding under indigenous people. percent (51%) of their shareholding under indigenous people.

The Community Share Ownership Scheme established Community Share Ownership Trusts (CSOTs) as vehicles of community development. The thrust of the CSOTs at inception was to ensure that communities benefit from the exploitation of natural resources within their areas. This would then be used as a measuring tool to assess the extent of compliance with the 51%-49% principle enunciated in the law. Ensuring that communities are direct beneficiaries of natural resources is not only ethical but most importantly brings about sustainable development and social cohesion. However, this principle encountered resistance from the private sector and some international players who viewed themselves as losers in the economic empowerment model.

Since their inception, CSOTs in Zimbabwe have operated with varying degrees of success where mining communities have been the major beneficiaries. However, recent legal and policy reforms in Zimbabwe have proved to be a major threat to the life and welfare of Community Share Ownership Trusts (CSOTs). Specific challenges came in the form of the Finance Act (2018) which repealed some of the 2010 provisions that the Government had introduced through the Indigenisation and Economic Empowerment Act [Chapter 14:33]. This brief explores the development gains of CSOTs in Zimbabwe and recommends ways of legally protecting and empowering them as important vehicles for community economic empowerment.

Read the full brief here (1MB PDF)

Source: Silveira House