Wadyajena slams Zhuwao for ‘scaring away’ investors
A PARLIAMENTARY portfolio committee has slammed Youth Development, Indigenisation and Economic Empowerment Minister Patrick Zhuwao for adopting a militant attitude towards potential investors, accusing him of setting up unrealistic targets on foreign firms to comply with the indigenisation threshold.
The portfolio committee on Youth Development, Indigenisation and Economic Empowerment chaired by Gokwe Nembudziya MP Justice Mayor Wadyajena (Zanu-PF) said Minister Zhuwao’s militant attitude does not help the country’s cause to court investors.
The committee noted that the intervention by President Mugabe in April this year in clarifying the indigenisation law and diffusing a stand-off between Minister Zhuwao on one hand, and Finance Minister Patrick Chinamasa and Reserve Bank of Zimbabwe Governor Dr John Mangundya on the other, could have been avoided had the former applied the law in a level-headed manner.
Cde Wadyajena said this while presenting a committee report during a pre-budget consultation seminar in Bulawayo at the weekend.
“His Excellency, the President of Zimbabwe Cde RG Mugabe had to clarify the policy a third time after Honourable Minister Zhuwao failed to interpret and understand the legislation, and openly contradicted the Minister of Finance and the Governor of the Reserve Bank, thereby causing confusion and capital flight from the market,” said Cde Wadyajena while presenting the committee report.
“The Minister set unrealistic dates for compliance, and then went on to threaten the shutdown of companies that did not meet his deadlines. Not only was this highly irresponsible, but added to the scepticism of the investment community about the Government’s seriousness in attracting meaningful investment.”
The committee recommended the expeditious amendment to the law to reflect the clarification made by President Mugabe.
“This is the only way to indicate that we mean business on policy consistency. Accordingly, relevant spokespersons must communicate within the confines of the law, and not based on conjecture,” said Cde Wadyajena.
The committee noted that the Localised Empowerment Accelerated Facility involving a $10 million revolving fund failed because financial institutions lost confidence in the transparency of the distribution of the money.
“The LEAF Fund, which is given major prominence within the (ministry) strategy, failed to launch and is explained as ‘unfulfilled commitments by financial institutions.’ The truth around the LEAF Fund is that the banks lost confidence in the initiative due to perceived mismanagement of the fund, with monies not reaching the intended beneficiaries and the high default rate,” said Cde Wadyajena.
The fund was a partnership between Government and the private sector.
The committee, however, bemoaned the inadequate allocation of financial resources to the ministry saying failure to do so would impede them from achieving set objectives.
“Inadequate budget allocation — for example, out of 300 000 school leavers, only 16 percent proceed to A-Level and, institutions of higher learning every year. The remaining 84 percent should be catered for by the ministry in terms of skills training. The ministry’s allocation is therefore not enough,” said Cde Wadyajena.
It was noted that while the idea of setting up a microfinance institution for youths is noble, issues of collateral that are raised ought to be addressed.
“What collateral will Zimbabwean youths present against these loans? Many deserving youths do not have tangible assets. And what are the thresholds of these loans interest rates and rate of payment?
“One of the things we have witnessed in the last few years is the high rate of default. Can you indicate safeguards that will limit defaulting amongst youth?” asked Cde Wadyajena.