$30 mil­lion seed fund­ing for in­dus­try

Chronicle (Zimbabwe) - - Front Page - Busi­ness Ed­i­tor

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

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