NIEEF bankrupt despite US$1,3 billion in shares

via NIEEF bankrupt despite US$1,3 billion in shares – The Zimbabwe Independent January 3, 2014 by Herbert Moyo

DESPITE concluding transactions for shares worth US$1,3 billion from businesses in line with the government’s indigenisation policy, the National Indigenisation and Economic Empowerment Fund (NIEEF) is bankrupt.

This is part of revelations contained in the ruling Zanu PF party’s latest central committee report to its 14th annual people’s conference held in Chinhoyi last month.

“Since 2010, NIEEF has concluded transactions with shares potentially worth US$1,3 billion from qualifying businesses in mining and quarrying sectors of the economy,” reads the report, adding that 11 companies issued shares to NIEEF as part of their indigenisation implementation plan.

“However, the National Indigenisation and Economic Empowerment Board (NIEEB) cannot dispose of or invest against the shares on the open market until such an instruction is issued,” the report notes before concluding “therefore NIEEF is technically bankrupt although nominally they have a wide array of shares”.

Against this background, Zanu PF recommended the capitalisation of NIEEF and the capacitation of NIEEB to further the aims of indigenisation, which it says have been met with “resistance from some elements in the legal, economic and political disciplines”.

“Had there been higher buy-in from these sectors, the programme would have moved with the intended speed and more benefits would be spread at the bottom branches of society,” the report reads.

Zanu PF further proposed to restructure NIEEB, saying it should be staffed with “people with the relevant political will” — in sync with wholesale resolutions at the conference that stated all key posts in government and state institutions posts should be held by party loyalists.

The report also shows many companies are still to comply with the indigenisation law, with Zanu PF suggesting MDC formations were to blame for “the little progress achieved”.

“There was no significant movement in defiant companies towards compliance. The major factor contributing to the little progress achieved is the confusion caused by dissenting policy position in the now-defunct Government of National Unity,” the report notes.

Zanu PF compiled what it called the List of Major Defiant Companies which includes Metallon Gold Zimbabwe, Duration Gold Zimbabwe, Tongaat Hulett, Standard Chartered Bank Zimbabwe and Murowa Diamonds, among others.

Meanwhile, at least 800 companies operating in economic sectors that were reserved for locals including agriculture, retail, transportation, employment and estate agencies are reported to have applied for indigenisation compliance certificates ahead of the New Year’s deadline.

In terms of the regulations, it is an offence for anyone including locals to operate in these sectors without the compliance certificate.

Indigenisation minister Francis Nhema appears to have backed down from government’s earlier stance of wholesale enforcement of indigenisation laws saying there should not be a one-size-fits-all approach.

Even President Robert Mugabe has pointed out that indigenisation is not solely about grabbing businesses from foreigners, but more emphasis should be placed on the creation of new home-grown industries.