via Companies to fund Indigenisation and Economic Empowerment Board February 10, 2014 NewsDay
THE National Indigenisation and Economic Empowerment Board (NIEEB) intends to levy all companies operating in Zimbabwe to sustain its operations in the absence of adequate budgetary support, Parliament was told last week.
NIEEB chief executive officer Wilson Gwatiringa told the Parliamentary Thematic Committee on Indigenisation and Empowerment that although the board had made proposals to levy 0,5% of annual turnover, it did not have the Statutory Instrument to collect the levy.
“We have, therefore, been dependent on fiscal budgetary allocations since inception with the result that the programme has been grossly underfunded,” he said.
In the 2014 National Budget, NIEEB was allocated $2,6 million against a bid of $10 million.
Gwatiringa said disbursements were usually different from what was allocated, adding that if the trend continues “we will get disbursement of under $1 million.”
The move to levy companies comes at there are differences in government on how the empowerment crusade would be implemented.
There is concern in some quarters that the empowerment crusade has to be implemented with the need to attract foreign direct investment in mind.
Zimbabwe is starved of foreign direct investment to help rebuild the economy which is showing signs of a slowdown despite the continued use of the multi-currency regime.
The banking sector has provided headaches to proponents of indigenisation on how it would comply with the law.
Critics have argued that the sector thrives on confidence and it is a tall order to “indigenise” deposits.
Gwatiringa told the parliamentary committee that NIEEB will continue to engage foreign owned banks.
“There are institutions that we are engaging with on how best they can comply with the law. I hope at the end of it all we will come up with a compliant industry,” Gwatiringa said.
In the period 2010-2013, NIEEB processed 1 471 indigenisation plans.
To date, NIEEB, through the National Indigenisation and Economic Empowerment Fund, holds 16% in Blanket Mine and 9,7% in Portland Holdings following the indigenisation of the two institutions. Payment for the shares would be done through forfeiting future dividends.