2 October 2013

Zimbabwe: Sovereign Wealth Fund Plans Hailed

Analysts have hailed Government's plans to set up a Sovereign Wealth Fund that is aimed at raising capital from internal resources to support wealth creating sectors to ensure sustainable economic growth.

Confederation of Zimbabwe Industries past president Mr Kumbirai Katsande yesterday said he hoped the establishment would happen soon as the idea had been on the cards for some time.

"I am hopeful that this comes to fruition at the earliest possible time as it is a noble idea that could be used as a tool to get the ailing wealth creating sectors such as manufacturing and agriculture back on track," he said.

Mr Katsande added that all that is needed is for Government to spell out clearly the terms of reference for the SWF so that it can achieve the intended goal of resuscitating industry and growing the economy.

An economic analyst, Mr Witness Chinyama agreed with Mr Katsande adding that the idea was a noble one that needed everyone's support.

"This is a noble Government initiative that could go a long way in reviving the economy considering we have vast natural resources that include minerals such as diamonds.

"If these are harnessed and mobilised towards such a fund then critical sectors such as manufacturing could also benefit and in the medium to long term this would curb further soaring of the public debt that is now around US$10 billion," he said.

Last week, Secretary for Finance, Mr Willard Manungo said the setting up of such a fund was very critical towards increasing production, while this will also ensure the country does not remain dependent on funding from regional and international financiers.

The fund seeks to use local resources as collateral on offshore loans and is being mooted by Government after the realisation that the Medium Term Plan failed to attain its goals.

President Mugabe last month emphasized the need for creating such a fund as part of measures Government intend to take in ensuring a resuscitation of all sectors of the economy during the official opening of the first session of the Eighth Parliament.

"Government will pursue Public, Private Partnerships and establish the Sovereign Wealth Fund as vehicles for mobilising resources for critical programmes of public infrastructure, irrigation and rural development.

"During this session, the Public, Private Partnership Bill and the Sovereign Wealth Fund bill will be brought in this August House for debate and consideration," Mr Katsande said.

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