Tuesday, December 18, 2012

(SUNDAY MAIL ZW) Indigenisation fund now US$4bn

Indigenisation fund now US$4bn
Sunday, 16 December 2012 00:00
Kuda Bwititi

The Sovereign Wealth Fund, which is expected to bankroll the empowerment of thousands of Zimbabweans, is now pegged at approximately US$4 billion after several foreign-owned companies ceded their 51 percent shareholding as stipulated by the Indigenisation and Empowerment Act. The fund will provide capital to thousands of Zimbabweans who wish to purchase stakes in foreign-owned companies.

This comes as two of the three giant platinum companies operating in Zimbabwe, Mimosa and Unki Platinum, which contributed about US$1 billion to the economy this year, have complied with the law.

ZimPlats is expected to reach full compliance this week. The Mimosa arrangement, with a total transaction value of over US$550 million, is the largest deal that has been completed so far.

Youth Development, Indigenisation and Empowerment Minister Cde Saviour Kasukuwere told The Sunday Mail last week that the fund had soared to US$4 billion following compliance by the “big guns”.

The US$4 billion was raised after companies ceded shareholding through the National Indigenisation and Economic Empowerment Fund (Nieef), community trusts as well as employee share ownerships schemes.

Most of the shares were allocated to Nieef at a rate of between 21 and 31 percent. For instance, US$1,8 billion was raised through Nieef.

Shares allocated to communities and workers under the community and employee share ownership schemes fall under the Sovereign Wealth Fund.

Cde Kasukuwere said: “We have made great strides in improving the fund. Within just a year, the fund has grown from zero to US$4 billion and this is testimony to the success of the law.”

The minister said community trusts and employee share ownership schemes account for a large part of the fund.

“About US$1,8 billion has gone to the National Indigenisation and Economic Empowerment Fund (Nieef) so far,” he said.

“If you factor in the fact that other contributions have been made from community and employee share ownership schemes, this puts the cumulative figure for the fund at about US$4 billion.”

Cde Kasukuwere said the fund is expected to grow further as several big companies are on the verge of complying with the law.

“We are pleased that the ZimPlats deal is almost sealed. We are hopeful that next week (this week) it will be a done deal.

“There are also several other deals that are going to be sealed soon and all this will contribute to the SWF,” he said.

However, it is understood that the Minister is not happy with the way the chairman of Implats, South Africa Dr Khotso Mokhele and executive director and chief financial officer, Brenda Berlin are allegedly scuttling efforts to seal the ZimPlats deal.

Reports suggest that the Government may be forced to ask the two to recuse themselves when the ZimPlats deal is being discussed.

Implats chief executive officer, Mr Terrence Goodlace was recently in the country where it is understood he had very cordial discussions with Minister Kasukuwere. ZimPlats is a subsidiary of Implats, SA.

Cde Kasukuwere added that Nieeb had bailed out the Reserve Bank of Zimbabwe through a deal signed on Friday. A total of US$57 million under Nieef will settle the Central Bank debt to Mimosa.
“The RBZ has a US$57 million debt with Mimosa, but we have managed to clear this debt through this deal.

“Nieeb will take over the debt as part of their shareholding in Mimosa and the RBZ will not have to repay Mimosa, but strike an arrangement through Nieeb. This is just an example of the effectiveness of this fund.”

Some of the companies that have fully complied with the law include Blanket Mine, PPC Cement Lafarge, Unki Platinum and Mimosa.

National Indigenisation and Economic Empowerment Board (Nieeb) chief executive Mr Wilson Gwatiringa said the primary role of Nieeb would be to provide funds for indigenous people to buy shares.

“The focus now is on compliance but as a board, our main function is to continue to enlarge the fund and ensure there is enough capital to finance indigenisation and for all Zimbabweans that are interested in the process,” he said.

To date, Community Share Ownership Trusts (CSOTs) have accrued US$114 million as seed capital. The money has been used to develop local communities. The trusts have been launched in seven provinces.

These include Chegutu Mhondo-Ngezi Chivero Zvimba (Mashonaland West), Marange Zimunya (Manicaland), Zvishavane (Midlands), Gwanda Umguza (Matabeleland South) Hwange Bubi Nkayi Binga (Matabeleland North) and Bindura (Mashonaland Central).

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