ONLY 16 community share ownership schemes are currently operational out of the 58 launched last year, Youth, Indigenisation and Economic Empowerment secretary George Magosvongwe has said.
By Tarisai Mandizha Business Reporter
The community share ownership scheme is a government initiative under the indigenisation programme aimed at ensuring that communities have shares in companies that exploit natural resources in their areas and use the proceeds from the shareholding to fund development projects in their communities.
Magosvongwe told the Parliamentary Portfolio Committee on Indigenisation and Empowerment yesterday that to date only 16 were operational as many companies were yet to pay seed capital.
“Out of the 58 community share ownership schemes only 16 are working. For a community share ownership scheme to start working companies should pay seed capital,” Magosvongwe said.
According to the indigenisation and empowerment law, foreign-owned mining companies operating in Zimbabwe are compelled to dispose 51% shareholding to locals and at least 10% of this equity is seeded towards community share ownership schemes which are reserved for the local community in which the firm operates.
Magosvongwe said the seeding of 10% to community share ownership schemes did not mean the investment was already operational. He, however, said introduction of the community share ownership scheme or trust had been done in businesses exploiting natural resources and government set up sectoral committees to assist ministers to come up with a sectoral specific implementation framework.
“The sector committees which are comprised of representatives from government, private sector and civil society concluded their work and government is considering the recommendations and the minister has already gazetted the mining sector and the rest will be published in due course,” he said
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Magosvongwe said the sector specific for indigenisation and economic empowerment framework for the mining sector required the disposal of 10% for community share ownership trusts and at least 5% for employee and management share ownership trusts.
