via ‘Empowerment board broke’ – DailyNews Live by Kudzai Chawafambira and Mugove Tafirenyika 7 FEBRUARY 2014
The National Indigenisation and Economic Empowerment Board (Nieeb) — a government body created to implement the indigenisation programme — says it is broke and failing to carry out its mandate.
Its chief executive, Wilson Gwatiringa, yesterday told Parliament that they urgently need capital.
Apart from government support, Nieeb is supposed to get dividends and shares — through its National Indigenisation and Economic Empowerment Fund (Nieef) — from indigenised foreign-owned firms.
However, implementation of the empowerment policy was last year thrown off balance as some foreign companies failed to fully comply while other indigenisation deals were halted amid concerns that there were structuring flaws.
“As we pursued compliance with the law, we encountered a plethora of problems that include a misunderstanding of the programme, resistance by some companies, intransigence, avoidance and politicisation of the economic programme,” Gwatiringa told Parliament’s Indigenisation and Economic Empowerment committee yesterday.
He said at present, there was no legislation is allowing them to collect levies while Nieef had not been capitalised, among other financial constraints.
“Though we made proposals and submissions on the levies, we still do not have the statutory instrument to collect them,” Gwatiringa said, adding that “we therefore, have been dependent on fiscal budgetary allocations since inception.”
He said the board has been grossly underfunded, receiving a $2,6 million allocation from Treasury out of a requested $10, 25 million in the 2014 National budget.
Gwatiringa said the situation was compounded by the fact that despite the meagre allocation, disbursement of the funds was in dribs and drabs.
“Previous experience has taught us that we do not normally get what we are allocated when it comes to disbursements as we are usually given 20 percent of the allocation.”
“If that trend continues, it means we are likely to get under $1 million,” he said.
He noted that it was unfortunate that Nieef is yet to be capitalised by Treasury and has no significant assets.
Gwatiringa highlighted that the board’s projects division — whose mandate is to provide financial assistance for business start-ups, rehabilitation and expansion as well as management buy outs — has been adversely affected by the perennial lack of financial resources.
“However, we continue to receive loan applications. On file we have applications with a total value of $58,4 million from different parts of the country,” he said.
Responding to enquiries by Chief Senators Nyamukoho and Nembire of Mashonaland East and Mashonaland West on why their areas had not benefited from the empowerment programme, Gwatiringa said Community Share Ownership Trusts were only for communities that had mineral resources and mining activities taking place.