The Sunday News
Judith Phiri, Sunday News Reporter
STATUTORY corporate bodies and the Industrial Development Corporation(IDC) have been urged to inject seed capital in small and upcoming businesses as a means of generating foreign currency for the country.
In an interview, consummate banker and founder of Bouyancy Capital Private Limited, Mr Innocent Chigwendere said the country was realising less foreign currency as most statutory corporate bodies such as the National Social Security Authority (Nssa) and IDC were not prioritising investing seed capital to small and upcoming companies.
“For the past 10 or 20 years we have not seen much new companies coming on board starting to operate and generate foreign currency for the country. My view is that while we have got the likes of Nssa and Industrial Development Corporation, instead of them investing money in banking institutions they need to invest in new projects.
“As we speak, we have got quite a number of people holding mining concessions but they cannot start because they do not have seed capital. So, we need companies like Nssa to get in and take equity from these people,” said Mr Chigwendere.
He said the entities can then put manageable credible structures and once that has been done, it then becomes easy to raise additional capital for small and upcoming businesses to kick start their projects.
Mr Chigwendere also noted that in South Africa the Industrial Development Corporation is made up of investment analysts who look at upcoming projects which they can invest in.
He added: “They then put their staff there as part of management, once the project kicks off, they withdraw or they sell their equity to investors, because a lot of investors are wary of investing especially in greenfield projects which lack constraints imposed by prior work. This method has become the engine of economic development in most countries.”
He said that most of the companies in the country do not need foreign investors and can survive from local transactions. Hence, he added that there was a need for new businesspeople or entrepreneurship set-ups to be backed up by Nssa or IDC when starting their own new ventures that generate foreign currency.
Mr Chigwendere noted that for a country’s economy to prosper there was a need to have at least new companies birthed every year, which he said was a growing trend seen in most developed countries. He, however, commended the Government for working flat out in terms of ease of doing business in the country and encouraged most small and upcoming businesses to desist from the “let’s wait and see” attitude.
“Most businesses have adopted a ‘let’s wait and see’ attitude whereby they say let’s see if the environment improves or let’s stop this until such a situation on the ground has improved, but it has not helped the country and the people of Zimbabwe,” said Mr Chigwendere.
