Regulating Against Business "Fronting" to Advance Black Economic Empowerment in Zimbabwe: Lessons from South Africa

Keywords: Black economic empowerment, indigenisation, business fronting, Zimbabwe, South Africa, distributive justice


This article examines Zimbabwe’s indigenisation legislation, points out some of its inadequacies and draws lessons from South Africa’s experiences in implementing its own indigenisation legislation. Both countries have encountered challenges relating to an upsurge in unethical business conduct aimed at defeating the objectives of their black economic empowerment programmes, policies and legislation. This practice is called business fronting. However, while South Africa has succeeded in enacting a credible piece of legislation aimed at addressing this issue, Zimbabwe has yet to do so. The article points out that the failure to regulate against business fronting poses the most significant threat to the attainment of the laudable aims and objectives of the indigenisation programme and related legislation. In order to avoid becoming a regulatory regime that is notorious for not only being functionally ineffective but also for tacitly permitting racketeering in reality, the article argues for the adoption of anti-fronting legislation in Zimbabwe using the South African legislation as a model.


Google_Scholar_58.png  ScienceOpen_Log034.png

Author Biographies

Tapiwa V Warikandwa, University Fort Hare

Tapiwa V Warikandwa. LLB, LLM, LLD (Fort Hare). Post-doctoral Fellow, Department of Mercantile Law, Nelson R Mandela School of Law, University of Fort Hare, South Africa. Email:

Patrick C Osode, University Fort Hare
Patrick C. Osode. LLB (Jos), BL (Nig), LLM (Lagos), SJD (Toronto). Professor and Head, Department of Mercantile Law, Nelson R Mandela School of Law, University of Fort Hare, South Africa. Email:




Alvarez and Barney 2008 SEJ
Alvarez SAand BarneyJB"Opportunities, Organisations and
Entrepreneurship"2008 SEJ171-173

Andreasson 2003 JCAS
Andreasson S "Economic Reforms and 'Virtual Democracy' in South Africa
and Zimbabwe: The Incompatibility of Liberalisation, Inclusion and
Development" 2003 JCAS371-384

Andreasson "Indigenisation and Transformation"AndreassonS
"Indigenisation and Transformation in Southern Africa"Paper
prepared for the British International Studies Association Annual
Conference(15-17 December 2008 Exeter)

Andreasson 2010 PG
Andreasson S "Confronting the Settler Legacy: Indigenisation and
transformation in South Africa and Zimbabwe" 2010 PG424-433

Andreasson 2011 B&S
Andreasson S "Understanding Corporate Governance Reform in South
Africa: Anglo-American Divergence, the King Reports, and Hybridization"
2011 B&S 647-673

National and International Perspectives"
Arrowsmith S "National and International Perspectives on the Regulation of
Public Procurement: Harmony or Conflict"in ArrowsmithS and Davies A
(eds) Public Procurement: Global Revolution(Kluwer Law International
London 1998) 5-26

BEE Commission
National Integrated Black Economic Empowerment
Black Economic Empowerment Commission A National Integrated Black
Economic Empowerment Strategy(Skotaville Press Johannesburg 2001)

Bogopane 2013 JSS
Bogopane LP "Evaluation of Black Economic Empowerment Policy
Implementation in the Ngaka Modiri Molema District North West Province,
South Africa"2013 JSS 277-288

Carmody "Ecolonization"
Carmody P "Ecolonization and the Creation of Insecurity Regimes: The
Meaning of Zimbabwe’s Land Reform Programme in Regional Context" in
Palloti A and Tornimbeni C State, Land and Democracy in Southern Africa
(Routledge New York 2016) 169-182

Carter and Wilton 2006 JEC
Carter S and Wilton W "Don't Blame the Entrepreneur, Blame Government:
The Centrality of the Government in Enterprise Development; Lessons from
Enterprise Failure in Zimbabwe" 2006 JEC65-84

Cheadle, Thompson and Hayson Inc et alBlack Economic Empowerment
Cheadle, Thompson and Hayson Incet al Black Economic Empowerment:
Commentary, Legislation and Charters(Juta Cape Town 2005)

Chekera and Nmehielle 2013 AJLS
Chekera YT and Nmehielle VO "The International Law Principle of
Permanent Sovereignty over Natural Resources as an Instrument for
Development: The Case of Zimbabwean Diamonds" 2013 AJLS69-101

Chiduza 2014 PELJ
ChiduzaL"Towards the Protection of Human Rights: Do the New
Zimbabwean Constitutional Provisions on Judicial Independence Suffice"
2014 PELJ 367-418

Chitereka and Hamauswa 2014 ZJPE
Chitereka G and HamauswaS"Mining Rights and Mineral Related
Corruption in Zimbabwe: The Case of Gwanda, Kwekwe and Chiadzwa
Mining Areas"2014 ZJPE69-83

Chowa and Mukuvare 2013 RJE
Chowa T and Mukuvare M "Zimbabwe's Indigenisation and Economic
Empowerment Programme (IEEP) As an Economic Development
Approach" 2013 RJE 1-18

Fargher The Herald
Fargher M "Whitewashed equality" The Herald Zimbabwe(4 November
2013) 10

Fredriksson and Svensson 2003 JPE
Fredriksson P and Svensson J "Political Instability, Corruption and Policy
Formation: The Case of Environmental Policy" 2003 JPE 1383-1405

Gallagher 2015 JMAS
Gallagher J "The Battle for Zimbabwe in 2013: From Polarization to
Ambivalence" 2015 JMAS27-49

Gamble Crisis Without End?
Gamble A Crisis Without End? The Unravelling of Western Prosperity
(Palgrave Macmillan Victoria 2014)

Genev 2005 EEPS
Genev VI "The 'Triumph of Neoliberalism' Reconsidered: Critical Remarks
on Ideas-centered Analyses of Political and Economic Change in Post-
communism" 2005 EEPS 343-378

Goko Daily News Zimbabwe
Goko C "Honour 2006 Plan, Zimplats Urges Govt"Daily News Zimbabwe
(29 April 2014) 12

Government of Zimbabwe First Report of the Thematic Committee
Government of Zimbabwe First Report of the Thematic Committee on
Indigenisation and Empowerment on the Operations of the Community
Share Ownership Trusts and Employee Share Ownership Schemes SC
(The Government Harare 2015)

Gumede Corruption Fighting Efforts
Gumede W Corruption Fighting Efforts in Africa Fail Because Root Causes
Are Poorly Understood
(Foreign Policy Centre Washington DC 2012)

Harvey 2006 GA
Harvey D "Neo-liberalism as Creative Destruction" 2006 GA 145-158

Helmsing Perspectives of Local Economic Development
HelmsingBPerspectives of Local Economic Development: A Review
(International Institute of Social StudiesThe Hague2010)

Kalula and M'Paradzi 2008SJ
Kalula E and M’Paradzi A "Black Economic Empowerment: Can There be
Trickle-down Benefits for Workers?"2008 SJ 108-130

Kaplow "General Characteristics of Rules"
Kaplow L "The General Characteristics of Rules"in Bouckaert B and De
Geest G (ed) Encyclopedia of Law and Economics (Edward Elgar
Cheltenham 2000) 512-513

Leal-Arcas International Trade and Investment Law
Leal-Arcas R International Trade and Investment Law: Multilateral, Regional
and Bilateral Governance (Edward Elgar Cheltenham 2010)

Leon 2009 JENRL
Leon T "Creeping Expropriation of Mining Investments: An African
Perspective" 2009 JENRL 33-40

Libby and Woakes 1980 ASR
Libby R and Woakes M "Nationalisation and the Displacement of
Development Policy in Zambia" 1980 ASR 33-50

Mabhenaand Moyo 2014 IOSR-JHSS
Mabhena C and Moyo F"Community Share Ownership Trust Scheme and
Empowerment: The Case of Gwanda Rural District, Matebeleland South
Province in Zimbabwe"2014IOSR-JHSS 72-85

Madhuku 2002 JAL
Madhuku L "Constitutional Protection ofthe Independence of the Judiciary:
A Survey of the Position in Southern Africa"2002 JAL232-258

Magure 2012 JCAS
Magure B "Foreign Investment, Black Economic Empowerment and
Militarized Patronage Politics in Zimbabwe" 2012 JCAS 67-82

Magure 2014 JAE
Magure B "Land, Indigenisation and Empowerment: Narratives that Made a
Difference in Zimbabwe's 2013 Elections"2014 JAE 17-47

Makoni 2014 COC
Makoni PL "The Impact of the Nationalisation Threat on Zimbabwe's
Economy" 2014 COC 160-179

Matunhu 2011 AJHC
Matunhu M "A Critique of Modernization and Dependency theories in Africa:
Critical Assessment"2011 AJHC 65-72

Matunhu 2012 SAPRJ
Matunhu M "The Indigenisation and Economic Empowerment Policy in
Zimbabwe: Opportunities and Challenges for Rural Development"2012
SAPRJ 5-20

Mazingi and Kamidza "Inequality in Zimbabwe"
Mazingi L and Kamidza R "Inequality in Zimbabwe" in Jauch H and
Muchena D (eds) Us Apart: Inequalities in Southern Africa(Open Society
Initiative of Southern Africa Johannesburg 2011) 322-383

Mbeki Architects of Poverty
Mbeki M Architects of Poverty: Why African Capitalism Needs Changing
(Picador Africa Johannesburg 2009)

Mhiripiri 2009 JLS
Mhiripiri N "Legitimising the Status Quo through the Writing of Biography:
Ngwabi Bhebe's Simon Vengesayi Muzenda and the Struggle for and
Liberation of Zimbabwe"2009 JLS83-98

Monibot How Did We Get into This Mess?
Monibot G How Did We Get into this Mess? Politics, Equality, Nature(Verso
Books London 2016)

Moyo "Land Reform and Redistribution"
Moyo S "Land Reform and Redistribution in Zimbabwe since1980"in Moyo
S and Chambati W Land and Agrarian Reform in Former Settler Colonial
Zimbabwe (CODESRIA Dakar 2013) 29-78

Moyo "Political Economy of Transformation"
Moyo S "The Political Economy of Transformation in Zimbabwe:
Radicalisation, Structural Change and Resistance" in Sall E (ed) Africa and
the Challenges of the Twenty-first Century: Keynote Lectures Delivered at
the 13th General Assembly of CODESRIA (Rabat Morocco, December,
2011) (CODESRIA Dakar 2015) 23-46

Moyo "Primitive Accumulation"
Moyo S "Primitive Accumulation and the Destruction of African Peasantries"
in Patnaik U and Moyo S (eds) The Agrarian Question in the Neoliberal Era:
Primitive Accumulation and the Peasantry (Fahamu Books and Pambazuka
Press Cape Town 2011) 61-85

Moyo "Scramble for Land in Africa"
Moyo S "The Scramble for Land in Africa" Paper presented at the Round
Table Dialogue on Land Reform, Land Grabbing and Agricultural
Development in Africa in the 21st Century (17-18 June 2013 Addis Ababa)

Munyedza 2011 BEJ
Munyedza P "The Impact of the Indigenisation and Economic
Empowerment Act of Zimbabwe on the Financial Performance of Listed
Securities" 2011 BEJ 1-14

Murombo 2010 SAPL
Murombo T "Law and the Indigenisation of Mineral Resources in Zimbabwe:
Any Equity for Local Communities" 2010 SAPL 568-589

Murombo 2013 LEDJ
Murombo T "Regulating Mining in South Africa and Zimbabwe:
Communities, the Environment and Perpetual Exploitation"2013 LEDJ 31-

Ncube Sunday Times
Ncube T "Empower the Majority, Not a Select Few"Sunday Times(1 August
2004) 17

Ndlela Financial Gazette
Ndlela D "Scandal Rocks Zuva Petroleum"Financial Gazette(20 February
2014) 2

Ngwerume and Massimo2014 JPAG
Ngwerume KJ and Massimo ET "Contribution of the Bindura Community
Share Ownership Trust to Rural Development in Bindura Rural District
Council of Zimbabwe"2014 JPAG 1-17

O'Connel Vindicating Socio-economic Rights
O'Connel P Vindicating Socio-economic Rights:International Standards
and Comparative Experiences(Routledge London 2012)

Osode "Advancing the Cause of Black Economic Empowerment"
Osode PC "Advancing the Cause of Black Economic Empowerment through
the Use of Legal Instruments"in Osode PC and Glover G (ed) Law and
Transformative Justice in Post-Apartheid South Africa (Spekboom Louis
Trichardt 2010) 261-290

Osode 2004 SJ
Osode PC "The New Broad-Based Economic Empowerment Act: A Critical
Evaluation"2004 SJ108-114

Philip 2012 JPS
Philip M "The Land Grab Corporate Food Regime Restructuring" 2012 JPS

Posner 1997 Harv JL & Pub Pol'y
Posner E "Standards, Rules, and Social Norms"1997 Harv JL & Pub Pol'y

Quinot and Arrowsmith "Introduction"
Quinot G and Arrowsmith S"Introduction"in Quinot G and Arrowsmith S
(eds) Public Procurement Regulation in Africa(Cambridge University Press
Cambridge 2013) 1-22

Raban 2010 PILJ
Raban O "The Fallacy of Legal Certainty: Why Vague Legal Standards May
be Better for Capitalism and Liberalism"2010 PILJ175-191

Raftopoulos "State, NGOs and Democratisation"
Raftopoulos B "The State, NGOs and Democratisation" in Moyo S,
Makumbe J and Raftopoulus B (eds) NGOs, the State and Politics in
Zimbabwe(SAPES Books Harare 2000) 21-45

Raftopoulos and Moyo 1995 EASSRR
Raftopoulos B and Moyo S "The Politics of Indigenisation in Zimbabwe"
1995 EASSRR 17-33

Ratnapala Jurisprudence
Ratnapala S Jurisprudence(Cambridge University Press Cambridge 2009)

Rawls Theory of Justice
Rawls A Theory ofJustice(Belknap Press of Harvard University Press
Massachusetts 1971)

Raz 1972 Yale LJ
Raz J "Legal Principles and the Limits of Law"1972 Yale LJ823-841

Rood 1976 JMAS
Rood L "Nationalisation and Indigenisation in Africa" 1976 JMAS427-447

Rood 1977 JMAS
Rood L "The Impact of Nationalisation" 1977 JMAS489-494

Scalia 1989U Chi L Rev
ScaliaA"The Rule of Law as a Law of Rules"1989 U Chi L Rev 1175-1181

Schauer Playing by the Rules
Schauer F Playing by the Rules(Clarendon Press Oxford 1991)

Selby Commercial Farmers
Selby A Commercial Farmers and the State: Interest Group Politics and
Land Reform in Zimbabwe(D Phil-thesis Oxford University 2006)

Sibanda 2014 IJPLP
Sibanda A "The Corporate Governance Perils of Zimbabwe's Indigenisation
Economic Empowerment Act 17 of 2007" 2014 IJPLP 24-36

Sithole and Chikerema 2014 ZJPE
Sithole AK and Chikerema A "Property Ownership by Zimbabwean Women:
A Myth or a Reality?" 2014 ZJPE 84-96

Southall 2007 RAPE
Southall R "Ten Propositions About Black Economic Empowerment in
South Africa"2007RAPE 67-84

Stark 2010 BC Third World LJ
Stark B "Jam Tomorrow: Distributive Justice and the Limits of International
Economic Law"2010 BC Third World LJ3-34

Stark "Jam Tomorrow"
Stark B "Jam Tomorrow: A Critique of International Economic Law"in
CarmodyC, Garcia F and Linarelli J (eds) Global Justice and International
Economic Law:Opportunities and Prospects(Cambridge University Press
Cambridge 2012) 261-272

Sustein 1995CLR
Sustein CR "Problems with Rules"1995 CLR 1021-1032

Tebbit Philosophy of Law
Tebbit M Philosophy of Law: An Introduction 2nded (Routledge London

Tekere Lifetime of Struggle
Tekere E A Lifetime of Struggle(SAPE Books Harare 2007)

Warikandwa and Osode2014 SJ
Warikandwa TV andOsodePC"Legal Theoretical Perspectives and Their
Potential Ramifications for Proposals to Incorporate a Trade-labour Linkage
into the Legal Framework of the World Trade Organisation"2014 SJ 41-69

Zikhali, Ncube and Tshuma 2014 IJHSS
ZikhaliW,NcubeGand TshumaN"From Economic Development to Local
Economic Growth: Income Generating Projects in Nkayi District, Zimbabwe"
2014 IJHSS27-33

Zimudzi 2012 JCS
Zimudzi TB "A Predictable Tragedy: Robert Mugabe and the Collapse of
Zimbabwe" 2012 JCS 508-511

Zuma "B-BBEE Not Just About Benefiting a Few Individuals"
Zuma J "B-BBEE Not Just About Benefiting a Few Individuals"keynote
Address to the Broad-Based Economic Empowerment Summit (3 October
2013 Midrand)

Case law

AMCO v Republic of Indonesia (Merits) 1992 89 ILR 368

Bharat Cooperative Bank (Mumbai) Ltd v Employees Union2007 4 SCC

Hamdard (Wakf) Laboratories v Deputy Labour Commissioner 2007 5 SCC

Himalayan Tiles and Marble (P) Ltd v Francis Victor Coutinho 1980 3 SCC

Mahalakshmi Oil Mills v State of AP 1989 AIR 335

NDP Namboodripad v Union of India 2007 4 SCC 502
How to Cite
WarikandwaT. V., & OsodeP. C. (2017). Regulating Against Business "Fronting" to Advance Black Economic Empowerment in Zimbabwe: Lessons from South Africa. Potchefstroom Electronic Law Journal, 20, 1-43.