GOVERNMENT is eyeing strategic collaborations with the pension industry which could result in the US$2 billion sector investing in industrial projects.
Speaking at the Zimbabwe Association of Pension Funds 5th edition of the Principal Officers and Chairman’s Convention that ended in Bulawayo yesterday, Industry and Commerce deputy minister Raj Modi said there are various opportunities for collaboration with pension funds.
Insurance and Pensions Commission director pensions and life Cuthbert Munjoma recently revealed that the whole pension fund industry is valued at US$2 billion.
Modi said the government was encouraged that the pension funds were seized with the responsibility to ensure that the national pension governance aligned with global standards.
“As already alluded to, our ministry, in conducting its mandate, always works with the private sector, business member organisations, consumer representative organisations as well as the general populace. In this effort, there is a lot of scope for the Zimbabwe Association of Pension Funds to collaborate with the ministry,” Modi said.
“Through the pension funds, (there can be) investment in industrial projects that are identified by the ministry or jointly identified as strategic and viable, in promoting economic growth and job creation in the economy,” he added. “(There can also be) enterprise development by providing funding for small-and-medium scale enterprises (SMEs) as a way of promoting entrepreneurship and industrial development.”
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Modi said other areas of collaboration included infrastructure development through investing in projects that are critical for industrial development, such as energy, transportation and telecommunications.
He said such infrastructural financing opportunities existed in all the designated special economic zones as well as cities and growth points.
The deputy minister said pension funds could invest in initiatives aimed at revitalising and modernising the country’s current and future strategic industries.
“Hence, greater scope under this heading exists for pension funds to improve on their contribution of promoting economic growth and competitiveness,” Modi said.
“(On) export development, (you cane make) use of your expertise and connections. We are of the view that pension funds can collaborate with the ministry to support export-oriented industries and thereby contribute to expansion of foreign exchange earnings and economic growth.
“This development will also be good for the industry in terms of nurturing economic bases that will, in turn, lead to increased pension contributions.”
He said research and development was another avenue through which pension funds could collaborate with the ministry.
“This can be done through pension funds’ funding of research and development initiatives that are targeted at driving innovation and industrial growth,” Modi said.
He added that there was also scope for pension funds to partner the ministry in developing regulatory frameworks that were meant to promote transparency, accountability and good governance in the industry, corporate social responsibility and data sharing.