Sovereign fund favoured to take over mines- poll

The Sovereign Wealth Fund- which is yet to be created- has emerged as the favourite to take over majority stakes in foreign-owned mining companies should the government go ahead with its planned indigenisation programme.

An internet poll by The Insider showed that managers were least favoured failing to get a single vote while the state-owned Zimbabwe Mining Development Corporation- which currently owns most of the mines on behalf of the state- garnered only 2 percent, the second lowest.

The ZMDC has been mired in a lot of controversies and its last chief executive is currently facing charges of fraud involving the awarding on a diamond mining contract in Marange.

The government has given foreign-owned mining companies until September to sell majority shareholding to locals. The companies had until May 10 to declare their plans on how they intended to localise.

The Sovereign Wealth Fund (SWF) got 36 percent of the vote followed by employees who got 21 percent. Local authorities came third with 19 percent followed by local companies and investment funds with 15 percent.

Private individuals got only 5 percent of the vote while the National Indigenisation and Empowerment Fund got 3 percent.

The poll was based on a simple question: “If the government goes ahead with the indigenisation of mining companies, who do you think should be the major shareholder?’

SWFs have been gaining popularity over the last few years with 17 being established since 2005. Last year they had assets estimated at $4.2 trillion.

There have been concerns, especially from the West, that SWFs could be used to control strategic industries for political rather than financial reasons.

China, which has vast surpluses, is the most watched as it has several SWFs and has overtaken Japan as the world’s second largest economy.

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