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Mugabe rejected as trustee of Zimbabwe's Sovereign Wealth Fund
25 Sep 2014 at 06:01hrs | Views
SENATE on Tuesday passed the Sovereign Wealth Fund (SWF) of Zimbabwe Bill with some Senators demanding the removal of a clause which said President Robert Mugabe should be a trustee of the fund.
The Bill, which creates a fund to be set aside for use during crises, was brought before Senate by Finance deputy minister Samuel Undenge.
According to Undenge, other African countries like Angola and Botswana already had a SWF from their natural resources like diamonds, which they would fall back on to pay for pension
obligations, provide capital injections in the event of crises or to ensure that future generations benefitted from the extraction of finite resources.
"The advantages of the Sovereign Wealth Fund are that it protects and stabilises the budget and economy from volatility, diversifies the non-renewable commodity exports, generates earnings giving greater returns than the foreign exchange reserves, generates savings for future generations, funds social and economic development, spearheads rural development and poverty alleviation, and ensures equitable distribution of the national wealth," Undenge said.
"The SWF shall be funded from royalties not exceeding a quarter of the royalties' payable in accordance with Chapter 7, Mining Royalties Duty and Fees of the Finance Act Chapter 22 in respect of the following minerals: gold, diamonds, coal, coal bed methane gas, nickel, chrome, platinum and such other minerals that may be specified for the purposes of Chapter 7 of the Finance Act Chapter 22 (4)."
Undenge said it will also be funded from a portion not exceeding one quarter of specified dividends on sales of diamonds, gas, granite, and other extractables by or on behalf of the Minerals Marketing Corporation of Zimbabwe, as well as other sources such as grants from government.
He said an 18-member board will run the affairs of the fund.
Manicaland Senator Patrick Chitaka (MDC-T) suggested that to protect the fund from abuse the President should not be among the trustees.
"You either remove the President completely from being a trustee or you remove his direct involvement in the running of the fund so that he becomes a trustee with no potential conflict of interest," Chitaka said.
Masvingo Senator Misheck Marava (MDC-T) said although the idea to set up a fall back fund was noble, he doubted the country's capacity to raise money for that purpose.
The Bill, which creates a fund to be set aside for use during crises, was brought before Senate by Finance deputy minister Samuel Undenge.
According to Undenge, other African countries like Angola and Botswana already had a SWF from their natural resources like diamonds, which they would fall back on to pay for pension
obligations, provide capital injections in the event of crises or to ensure that future generations benefitted from the extraction of finite resources.
"The advantages of the Sovereign Wealth Fund are that it protects and stabilises the budget and economy from volatility, diversifies the non-renewable commodity exports, generates earnings giving greater returns than the foreign exchange reserves, generates savings for future generations, funds social and economic development, spearheads rural development and poverty alleviation, and ensures equitable distribution of the national wealth," Undenge said.
"The SWF shall be funded from royalties not exceeding a quarter of the royalties' payable in accordance with Chapter 7, Mining Royalties Duty and Fees of the Finance Act Chapter 22 in respect of the following minerals: gold, diamonds, coal, coal bed methane gas, nickel, chrome, platinum and such other minerals that may be specified for the purposes of Chapter 7 of the Finance Act Chapter 22 (4)."
Undenge said it will also be funded from a portion not exceeding one quarter of specified dividends on sales of diamonds, gas, granite, and other extractables by or on behalf of the Minerals Marketing Corporation of Zimbabwe, as well as other sources such as grants from government.
He said an 18-member board will run the affairs of the fund.
Manicaland Senator Patrick Chitaka (MDC-T) suggested that to protect the fund from abuse the President should not be among the trustees.
"You either remove the President completely from being a trustee or you remove his direct involvement in the running of the fund so that he becomes a trustee with no potential conflict of interest," Chitaka said.
Masvingo Senator Misheck Marava (MDC-T) said although the idea to set up a fall back fund was noble, he doubted the country's capacity to raise money for that purpose.
Source - newsday
