DISAGREEMENTS over which ministry is to house the country's Sovereign Wealth Fund (SWF), into which proceeds from natural resource rents such as royalties are to channeled, have stalled establishment and running of the fund, according to the Economic Planning and Development ministry.
Government's medium term plan for the economy launched last year identified the need to establish the SWF to effectively manage natural resource rents such as royalties.
However, the unity government, whose establishment was precipitated by hackling over which political party would hold which portfolio, is yet to come up with a decision as to under which ministry the SWF should be placed.
"Expedience, however, shows that it has to be under the Finance ministry (but) there has been little progress on this proposal in spite of the immense benefits that would accrue from SWF," Economic Planning and Development minister Tapiwa Mashakada said in the first annual report on the MTP released early this week.
When it was initially mooted, the fund was also supposed to house proceeds from shares acquired under the indigenisation and economic empowerment programme. However, proceeds from this programme, being championed by Zanu PF, are now being housed in the National Indigenisation and Eonomic Empowerment Fund (NIEEF), itself housed under the Ministry of Youth Development, Indigenisation and Empowerment headed by Saviour Kasukuwere.
Mashakada (MDC-T) has argued that the Indigenisation ministry's mandate was not broad enough to administer the fund, into which state resources are to be entrusted.
To date, NIEEF is the caretaker for the 21% stake for the indigenous obtained from Unki Mine, 16% stake from Blanket Mine, including a cash payment of US$3 million and, even though it is still subject to discussion, a 31% stake in Zimplats.
NIEEF is planning to raise US$1 billion through collection of the empowerment levy, borrowing through empowerment bonds, strategic aid, as well as getting lines of credit from banks.
However, there have been delays in putting in place the statutes to enable this.
Indigenisation minister Saviour Kasukuwere said the fund will be used to finance infrastructure projects as well as to set up the Harare Stock Exchange, a bourse that will run parallel to the current Zimbabwe Stock Exchange, only it will specialise in shares from the indigenisation process.
In partnership with private companies Brainworks Capital and Singular Systems, the indigenisation ministry is planning to set up an Indige-Index, which will trade the shares from the fund.
Sovereign wealth funds have gained ascendancy throughout the world, particularly in industrialising nations. They buy large stakes in companies and give governments exposure to sectors they might otherwise be unable to enter.
Many resource-rich countries have established SWFs. The United Nations Conference and Trade and Development 2012 World Investment report noted that with their long-term and strategically-oriented investment outlook, SWFs will invest in productive sectors and infrastructure in developing countries.