The Zimbabwean government is implementing the indiginization law in full force. it requires foreign companies to cede 51% of their business to local blacks.
The process has already seen seeral companies under threat to lose their operating license, including Zimplats, Barclays, Old Mutual and Nestle.
Last week the government announced it would manage the assets of the companies until a transfer can be made to the local business people. *side eye* So naturally the next step would be to create a Sovereign Wealth Fund to help the money grow right.
Only problem is that in order for a country to create a sovereign fund it needs to have low levels of international debt. Zimbabwe has alot of foreign debt ,and is even struggling to pay the Internatonal Monetary Fund. Another requirement for a sovereign fund, is that the country needs to have a surplus on their budget, Zimbabwe has not seen a surplus for a while now. In fact the country budget has been in deficit since the early 2000’s.
The brilliant plan for the sovereign fund is the brainchild of the Ministry of Youth, indiginization and Empowerment, which aims to raise about $5 billion in the next 5 years.
There are concerns that the fund is just another way for government to pocket the money from the provate sector.