Wadya­jena slams Zhuwao for ‘scar­ing away’ in­vestors

Chronicle (Zimbabwe) - - National News - Zva­maida Mur­wira Harare Bureau

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.

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