Mining revenue may comprise portion of Sovereign Wealth Fund of Zimbabwe- report
The Sovereign Wealth Fund of Zimbabwe may obtain up to a quarter of royalties from mining as well as the same share of special dividends from sales of state minerals and metals. This was revealed by a report from Bloomberg which obtained a draft of the planned sovereign wealth fund.
The report said that the parliament may also allocate money for the fund. Moreover, a board comprised of 16 members will make the decisions regarding the activities of the fund. They will allow the fund to withdraw money which will be used to pay for infrastructure development in the country.
Zimbabwe's Deputy Mines Minister Fred Moyo told Bloomberg through a phone interview that the document will be presented to the parliament early next year. He added, "It's critical for us to have a sovereign wealth fund, and that's what every nation should do to address vulnerable situations."
The sovereign wealth fund is one of the options considered by President Robert Mugabe to fund the recovery of the economy which had declined by 40% in eight years from 2000 to 2008, the report said. An estimate from the International Monetary Fund pegged the country's inflation rate at 500 billion percent after export of crops like roses and tobacco decreased when white-owned commercial farms in Zimbabwe were seized. The seizure was authorized by a law which forced foreign or white-owned firms to sell or cede 51% of their assets in Zimbabwe to black Zimbabweans or the government, the report said.
A separate document signed by Mugabe which Bloomberg also got from the Ministry of Finance this month said the government is also thinking of selling bonds, reengaging with international finance institutions, securitizing remittances and establishing special economic zones to finance the recovery.
The Reserve Bank of Zimbabwe will be overseeing the operations of the sovereign wealth fund.