The Sunday News
Khumbulani Vodloza Sibanda
TWO weeks ago the Minister of Finance and Economic Development, Professor Mthuli Ncube announced that Government would avail a $500 million national venture fund which is targeted at young entrepreneurs by February this year.
This is the way to go given that most of the country’s economy is in the hands of small and medium enterprises, a majority of which are owned by young people. As Government pushes to turn around the economy, it should be noted that the result will be a completely new and different economy driven largely by young entrepreneurs and technology.
Zimbabweans should therefore disabuse themselves of the ill-informed and misguided notion that the major conglomerates of the bygone era such as the Anglo-American Corporation and Lonrho will miraculously revive themselves and come to provide jobs. Although new conglomerates such as Innscor Africa will continue to have a place in the economy, most people will be employed by small businesses.
The initiative comes against the background of other funding programmes such as that provided by Empower Bank and the Zimbabwe Women’s Microfinance Bank (ZWMB), which are serving the youth and women constituencies respectively. Add to that the CBZ-funded Smart Agriculture Programme.
While some youths especially in the oppositional realm are being taught to baselessly criticise such Government efforts and shun them to score cheap political points, young progressive Zimbabweans from various economic sectors are availing of such funds, growing their businesses and employing fellow youths. Yes, as a nation, we still have a long way to go but we are off to a right start.
Although the minister did not disclose the modalities and qualifying criteria of the fund, one hopes that it will operate differently from other past such interventions like the Social Dimension Fund of the 1990s and the Kurera/Ukondla Youth Fund under the then Ministry of Youth Development Indigenisation and Economic Empowerment which was headed by the self-exiled Saviour Kasukuwere.
The two funds were characterised by very poor repayment rates as many beneficiaries treated them as Government funds which should not be repaid. They were supposed be revolving so that they could help as many people as possible but this did not happen.
This was partly due to the politicisation of the funds especially the latter with Kasukuwere using the Youth Fund to gain personal political mileage ahead of the 2013 harmonised elections. This resulted in some non-business minded youths accessing the funds only for them to deploy such scarce and valuable resources to consumptive personal purposes such as paying bride prices or acquiring liabilities such as motor vehicles because they had neither viable business ideas nor functional businesses on the ground.
The funds also fell victim to lack of customer education on the part of the dispensing banks. Yes, some beneficiaries had running businesses but they lacked training in running businesses and handling such borrowed funds resulting in them failing to turn enough profit to repay the loans.
Funds such as Kurera/Ukondla were disbursed through commercial banks and building societies which could have arranged training workshops for the beneficiaries but this did not happen.
This was partly due to the local banking culture in which banks are not prepared to invest in their customers beyond loans and overdraft facilities. The politicisation of the funds drove fear in the banks which could have joined forces with Kasukuwere’s ministry to organise grassroots training workshops.
This also worked against the banks which, out of fear, chose not to collect the unpaid debts to this day.
Last weekend President Emmerson Mnangagwa spelt out the need for solutions instead of dwelling ad nauseam on challenges when he said: “We have heard of the problems. We can’t continue speaking of problems only. We need to talk about solutions.”
And he was right. We cannot continue to sing the chorus of challenges without also expending efforts in finding solutions. As the country moves forward towards attaining the President’s Vision which envisages Zimbabwe being middle income economy by 2030, it should be noted that for as long as the nation continues to root everything it does in past cultures and practices it may be difficult to attain the vision.
Zimbabwe is part of the global village which is driven mostly by technology. For as long as banks continue to operate using the 1960s and 1970s business model, the nation is likely to miss out on the technology dividend.
A lot of young people have created wonderful technological innovations such as applications for various tasks but have not been able to commercialise their initiatives due to lack of funding.
As Government sets the qualifying criteria and modus operandi of the national venture fund, one fervently hopes that the youth who are running or have plans for technology-based enterprises also access funding.
Banks should wake from their slumber and study how their counterparts in the developed world are handling the banking and funding needs of technology-driven start-up and enterprises. Banks which are going to insist on the brick and mortar businesses only for funding risk remaining tethered in the past.
In the same way that the Reserve Bank of Zimbabwe (RBZ) embarked on the financial inclusion programme a few years ago, it would serve the nation well if it also drives financial support for technology-based enterprises.
Zimbabwe’s universities such as the Harare Institute of Technology (HIT), the National University of Science and Technology (NUST) and the University of Zimbabwe (UZ) are churning out graduates in various technical and technological disciplines and most of them end up in South Africa and abroad despite possessing innovations which could put the country on the world map in terms of technological enterprises and innovative solutions to some of the nation’s day to day challenges.
As Government continues to avail facilities such as the national venture fund, it should look at areas which have the potential to employ the most people, those which have the potential to solve some of the nation’s problems or those sectors that have the potential to generate exports that bring in the much-needed foreign currency.
