As Zimbabwe starts its preparation process for the 2021 National Budget, the Ministry of Finance presented the 2021 Pre-Budget Strategy Paper on the 16th October. This paper seeks to highlight and justify what needs to be prioritized by the National Budget, and this time it had some little focus on entrepreneurship, this we embrace however, more can still be done. Entrepreneurs are the problem solvers and Zimbabwe is abundantly blessed with them, all they need is support from government, financial houses and the community at large. Please find attached 2021 Pre-Budget Strategy Paper at the end of the article.
The 2021 pre-budget strategy paper highlighted the need to reinvigorate the industry so as to stimulate domestic production, unemployment and add value to the low value output in the agriculture and mining sector. This comes at a time when the country is exporting a number of unprocessed and semi-processed minerals such as gold, chrome, platinum only to mention a few. The agricultural sector has the same problem of exporting unprocessed or semi-processed produce. The government through this paper admitted that the shortage of foreign currency, high productive cost and aggregate demand has been contributing factors to the death of the manufacturing sector. There is now high need for government to craft and implement transparent policies that will see the rise of the Zimbabwean Manufacturing sector again.
Domesticating Value Chains/Import Substitution
The Minister of Finance through the strategy paper, pledged to support companies/entrepreneurs that seek to exploit opportunities in farm produce value addition and mineral beneficiation through appropriate funding models. He pointed out the covid-19 pandemic as being the major setback in pursuing this objective in the 2020 period. Opportunities in this sector include jewelry manufacturing, lithium cell manufacturing, nickel products manufacturing and food processing only to mention a few. They might be also need to introduce some incentives that promote value addition and strong implementation of the tax applied on exportation unprocessed minerals.
National Venture Capital Fund
Inaccessibility of capital has led to premature death of a number of businesses. This has also been blocking young entrepreneurs and innovators with great ideas to start. We stay in a community that doesn’t appreciate entrepreneurship, and raising fund through borrowing from friends and family might not bring any positive result. Financial houses are not tolerant to risks associated with green field projects. Crowd funding has been tarnished its image by pyramid schemes that have taken hard earned money from the already struggling Zimbabweans. So this comes as good news to entrepreneurs, hoping it will be implemented well. The minister highlighted some progress stating that the guidelines are in the final stages of drafting, under which the company will operate, as well as the procedure to secure funding for the investees.
Capacitating empowerment institutions
This also comes as positive news to youths and female entrepreneurs. Main empowerment institutions that offer loans are the Women and Development Bank and Empowerment Bank. Empowerment Bank is mainly for youths, it took off on a great note however, recently have heard reports of youths complaining that Empowerment Bank now require collateral security as well, which the youths doesn’t have. Probably Empowerment Bank can consider the Venture Capital Funding model.
The pre-budget strategy paper comes with a light of hope to SMEs and Start-Ups and if the proposed strategies are transparently implemented, it can largely contribute to economic growth hence attaining the Vision 2030.