The Minister of Finance Mthuli Ncube presented his budget earlier today and the emphasis in 2020 will be moving away from austerity to growth.
In line with this goal is the allocation of ZW$500 million which will be disbursed through a National Venture Capital Fund:
In order to increase economic opportunities and participation by Zimbabwean Youth in national development, the National Venture Capital Fund will be capitalised in both local and foreign currency, to incorporate the financing of start-up projects of our youth with preference being given to targeted areas in the context of the Local Content Strategy.
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Treasury, through the 2020 Budget is committing ZWL$500 million for this Fund.Finance Minister – Mthuli Ncube 2020 Budget Speech
One function of the Fund was stated and that will be to “provide affordable loans to young entrepreneurs including those engaged in production, that way encouraging them to be job creators and not job seekers.” From this descriptor its not entirely clear how the National Venture Capital Fund will differ from Microfinance companies that already exist in droves.
One of the questions that quickly came to mind for me is the fact that in last years budget, there was a similar announcement to start multiple venture capital funds to help SMEs and empower youth and women:
This Budget seeks to contribute towards the establishment of Venture Funds, targeting the game changing SMEs sectors. The Venture Funds will augment the role of the Empower bank and Women’s bank.Mthuli Ncube in 2019
It’s not clear if the National Venture Capital Fund to be launched this year is the fruition of last years target or if indeed that target was met but if the fund carries out its mandate as outlined in the budget this will become a huge development as funding has been the Achilles heel for too many local startups.