$30 million seed funding for industry
GOVERNMENT has availed $30 million seed industrial development funding and opened up consultations with the private sector with a view to identifying strategies for promoting job creation in the economy.
Finance and Economic Development Minister, Professor Mthuli Ncube, has said Treasury stands ready to put in place a taxation regime targeting job creation, especially incentivising investors, corporates and entrepreneurs.
In his 2019 national budget statement presented last Thursday, Prof Ncube gave an outline of elements of the proposed incentives or tax holidays for the jobs framework. These include a proposed rebate on additional jobs created and will not apply on job replacement.
“The rebate claim should not be more than 50 percent of the bill paid. The employee covered should be in employment for at least 12 months. The rebate will also cover apprenticeship and employment of graduate trainees,” said Prof Ncube.
“The rebate system will be for a fixed amount for each job created and the rebate will not be claimed in retrospect. Treasury will finalise the incentive framework and other supportive job creation measures during the first quarter of 2019.”
To buttress this job creation thrust, Prof Ncube announced in his budget, the establishment of an industrial development fund with $30 million seed capital to facilitate the revival of some of our industries.
“Government will restructure the Industrial Development Corporation of Zimbabwe to revert to its core mandate of industrial development financing through the Industrial Development Fund as provided in terms of the Industrial Development Corporation Act,” he said.
“The 2019 budget allocates US$30 million as seed money for the Industrial Development Fund as venture capital. This allocation is in addition to the budgetary support we have provided through the Ministry of Industry and Commerce to capacitate the Industrial Development Corporation of Zimbabwe.”
Zimbabwe’s industries continue to operate below capacity due to a myriad of challenges including lack of capital finance, obsolete equipment, competition from cheap imports and technology gaps. A weak domestic industry has seen the country relying more on imports, which drain the scarce foreign exchange and cut the job market.
In view of this, Prof Ncube stressed the need to strike a balance between creating a conducive environment for investment and protecting workers’ rights as enshrined in the country’s constitution. He noted that Government was already engaged in the process of aligning the Labour Act with the Constitution and International Labour Organisation Conventions.
In the 2019 budget statement, Prof Ncube said the Tripartite Negotiating Forum (TNF) Bill, which seeks to promote social dialogue between Government, labour and business, will be submitted to Parliament in 2019 following Cabinet approval. He said the Bill was critical in ensuring effective consultation, co-operation and negotiation on core national social and economic issues.
“The TNF Bill, therefore, seeks to establish this social dialogue platform as a legal entity and to ensure greater accountability and effectiveness in the work of the TNF,” said Prof Ncube.
Prof Mthuli Ncube