The National Indigenisation and Economic Empowerment Fund (NIEEF) meant to assist locals to purchase shares in multinational firms has not yet been capitalised, Parliament heard on Thursday.
Through the Indigenisation Act, the Government established the empowerment fund, which was also intended to provide financial resources for business start- ups as well as finance capacity building programs for locals.
The National Indigenisation, Economic and Empowerment Board (NIEEB) administers the fund on behalf of the Government.
NIEEB chief executive Mr Wilson Gwatiringa told the Portfolio Committee on Youth, Indigenisation and Economic Empowerment that the fund only existed on paper.
Mr Gwatiringa said the fund was supposed to be funded primarily through a levy on all foreign companies operating in Zimbabwe, Treasury allocations and borrowings.
“Unfortunately, NIEEF was never capitalised as the levy was never put in place owing to many factors including the bad state of the economy,” he said.
“Due to lack of capital, NIEEF never had funds to support share acquisitions by indigenous investors or to buy shares to warehouse in its portfolio.”
The NIEEB is also charged with advising the responsible Minister on indigenisation and economic empowerment strategies as well as oversee compliance with the enabling Act, which compels foreign firms with a minimum asset value of $500 000 to sell 51 percent equity to local people.
Zimbabwe government has rolled out Employee Ownership Schemes and Community Ownership Trusts to enable locals participate in the ongoing indigenisation of the economy. — New Ziana