Zimbabwe’s planned sovereign wealth fund may get as much as a quarter of mining royalties and the same share of “special dividends” on state mineral and metal sales. Parliament will also be able to appropriate money to benefit the fund.
A 16-member board will decide on the fund’s activities, allowing it to make withdrawals, primarily to pay for infrastructure developments, according to a draft of the Sovereign Wealth Fund of Zimbabwe Act obtained by Bloomberg News.
“That document will be taken to parliament sometime early next year,” Fred Moyo, the country’s deputy mines minister, said in a Nov. 22 interview by phone. “It’s critical for us to have a sovereign wealth fund, and that’s what every nation should do to address vulnerable situations.”
President Robert Mugabe, who extended his 33-year rule in July elections, is considering a range of options to finance the recovery of Zimbabwe’s economy, which shrank by 40 percent between 2000 and 2008. The country suffered from inflation estimated at 500 billion percent by the International Monetary Fund after the seizure of white-owned commercial farms slashed exports of crops including tobacco and roses.