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Zimbabwe has a total of 61 registered community share ownership trusts (CSOTs), but only 14 are active, according to the National Indigenisation and Economic Empowerment Board (NIEEB). Companies involved in extractive businesses in areas where CSOTs are have pledged $109 million but $30 million has been deposited into the community trusts’ accounts. Of the money given, $8 million has been spent on community projects.
We quoted NIEEB acting legal and corporate secretary Rangu Nyamurundira yesterday saying:
“To date we have 61 CSOTs in every single district in Zimbabwe. Some are operational and some are not. Right now we have about 14 that are fully operational and that are doing their projects. Not less than $8 million has been rolled out to 14 trusts that are now operational and they have started doing various projects in their different communities which include horticulture, poultry, road construction and refurbishment, schools, hospitals and other different projects.”
This is great work, but we can achieve more.
Since the first CSOT was launched in Mhondoro-Ngezi in Mashonaland West in October 2011, we have had some success stories. The leading ones must be the Tongogara CSOT in the Midlands, the Mhondoro one and others in Zvishavane in Midlands, Gwanda and Umguza in Matabeleland North and South respectively. These must be among the 14 that are doing recognisable projects. Through the trusts, communities now have clinics, roads, schools and income generating projects that have helped improve the quality of their lives.
But a closer look at the success rate is not as impressive as we expect.
In percentage terms, the success rate of the CSOT concept is 22 percent, 27 percent of the pledged money has been made available and of this 26 percent has been used.
What problems are the 47 CSOTs which only exist on paper with nothing on the ground, facing? It is probable that many are indeed inactive because of the failure by mining companies to fully pay the $109 million they pledged. The Marange-Zimunya Trust, initially touted as the country’s largest going by the amount of money earmarked at $50 million, could fall in this category. This follows recent revelations that management at five firms mining diamonds at Marange were “unsure” of how much money they had to invest in the trust. Of the pledged $50 million, they had provided a measly $200,000 as a “courtesy” gesture, not as a mandatory obligation consistent with all CSOTs.
NIEEB has to go down and find out why only 22 percent of the registered CSOTs are working. If the reason is that no money has been made available in violation of pledges the investors made publicly, relevant authorities have to call the companies to do the honourable thing by fulfilling their commitments.
That only 26 percent of the money available, $8 million out of $30 million, has been spent on community projects is good and bad at the same time. It is not good in the sense that it is money that is lying idle, really, yet need for its use is glaring. It must be accruing interest in banks, yes, but we earn more profit when the money gets down to work for communities for the common good. At the same time, the point that less than a third of the money has been used can be good if it is a reflection of judicious, not impulsive spending on the part of CSOT managers. Using money just because it is there is discouraged.
While communities expect all the resources availed through the trusts to be spent on projects that transform their lives, they also expect caution and professional spending to ensure sustainable development.
We have interest in the success of CSOTs, not only because they won an election as a manifesto item that must be implemented, but also because we have seen how critical the schemes can be in terms of stimulating genuine, broad-based empowerment, community development and poverty eradication. The government is struggling for money and has had to move civil servants pay dates once or twice and taken some drastic measures to raise money for immediate, statutory commitments. The CSOTs have helped a lot in removing a sizeable burden that the government had to bear.
NIEEB, in discharging its supervisory role, should get all the registered CSOTs working, enforce the requirement for companies that pledged to meet their pledges and for those trusts that got their allocations to use the resources diligently.
derick.khumalo
Online Reporter