The report that Meikles Limited has received $89 million in the form of Treasury Bills from the Reserve Bank of Zimbabwe as payment for a loan given to the central bank at the height of hyperinflation is welcome.
It is always good news when our cash strapped Government makes an effort to repay its obligations.
It shows the commitment to revive the economy through getting rid of all our debts, as many and huge as they are.
Although the Meikles debt is one that leaves us confused, (it was never explained how it was used by the previous RBZ management), the fact that it will be paid is a huge relief.
Not only to Government, who have reduced the RBZ debt they assumed, but to the company itself and its employees.
Meikles’ performance has not been up to scratch over the past decade and the company has failed to declare a dividend for its shareholders in those 10 years.
We have witnessed its retail sector, particularly the TM Supermarkets, struggling to beat competition from other big supermarkets. And the reason for all this has been that the money owed by the Central Bank was meant for its operations so the company could not break even without getting it back.
Now that the money will be repaid , Meikles has said it will restructure its business operations and revive the retail sector to drive growth.
But we also hope to see something more happening from these funds.
Meikles executive director Mark Wood told a parliamentary portfolio committee in August that the company would only be able to assist its employees to buy the company’s shares through the Employee Share Ownership Trust if RBZ paid up.
“So when we eventually receive our money from Government in cash, Meikles will lend the money to the trust to acquire the remaining shares as well as pay the pension fund back the money it invested in the trust,” Wood said then.
Employee Share Ownership Trusts are envisioned in the Indigenisation and Economic Empowerment (General) Regulations of 2010. The model of Zimbabwe’s Indigenisation Law places prominence on wealth creation through broad-based participation of the indigenous people in economic activities.
This is expected to improve the livelihoods of the many Zimbabweans who are not benefiting a lot from the companies they dedicate most of their lives to.
Meikles employees will only benefit from the trust once the shares are fully paid up, as the company now has an avenue to pay for them.
Although we do not expect it to happen overnight, we hope it will happen within a reasonable timeframe.
Since Meikles management said it will pay when government pays, we really hope they will hold up their end of the bargain and pay for those shares so that employees finally benefit from the scheme. Government has held up its end of the bargain so we expect Meikles to play its part.