via Unskilled threat to empowerment: Minister 29 June 2014
YOUTH and Empowerment deputy minister, Mathias Tongofa has admitted government was dishing out company to youths under its empowerment drive irrespective of the costs of entrusting the viability of the firms on unskilled beneficiaries.
Tongofa told a National Business Council of Zimbabwe (NBCZ) meeting in Chinhoyi the success of the controversial indigenisation initiative could face challenges due to that the majority of Zimbabweans had serious capacity deficits despite their determination.
“A huge majority have been blessed with more determination than ability to conduct businesses,” Tongofa said.
“While the acquisition of much land, property and shares in foreign dominated firms has given us a lot of advantage in terms of resource ownership, there still remains a critical shortage of business skills and knowledge.”
Zimbabwe’s last 15 years have seen President Robert Mugabe’s government embark on a multi-pronged black economic empowerment drive; from the land reform programme to the ongoing company grabs.
Critics say the populist policies have had a negative impact on the country’s fragile economy, a situation that has resulted in the current economic crisis.
The chaotic and often violent land redistribution exercise brought a once thriving agricultural sector to its knees and only this year at least 2.2 million people are unable to feed themselves and now rely on aid agencies.
Millions of scarce funds have been doled out to mostly Zanu PF youths from commercial banks under empowerment schemes funded by different companies.
In most cases, the beneficiaries have misappropriated the funds and simply disappeared, leaving government the burden of repaying the money.
Tongofa said he was disappointed by the default rate on loans extended to youths across the country.
“Many youths and entrepreneurs have started businesses which have eventually not operated sustainably,” he said.
“Many borrowed money from the funding pools which were made available, but to date less than 70% has been repaid. Is it because most of the projects had not been well thought out or these youths just went away and squandered the money because they do not have an idea of what is supposed to be done.”
Mashonaland West governor Faber Chidarikire, concurred.
“It takes a lot of skills and training to be able to fully satisfy the challenging demands of an economy that is going through change,” he said during the same event.
“There is need to train our youths in business and practical management skills before they get money. In fact, we have graduates who we have not given money but could have done much better.”