GOVERNMENT delays in signing advance dividend agreements with Mwana Africa’s Freda Rebecca gold mine is delaying the disbursement of $1 million to the Bindura Community Share Ownership Trust, Parliament heard on Thursday.
As part of the government’s empowerment law, foreign owned firms pledged $10 million towards communities in which they operate in addition to the 51 percent shares they are required by law to cede to local blacks.
The Bindura Community Share Ownership Trust (BCSOT), which was set up in 2012, last year received $1 million from Freda Rebecca with the balance to be paid over 10 years. But the miner had withheld payment for this year pending finalisation of the indigenisation agreement with government.
Currently, 15 percent of Freda Rebecca shareholding is in indigenous hands – Zanu PF lawmaker Kenneth Musanhi – and last month Mwana Africa said it was in talks with BCSOT and a consortium of local indigenous businessmen over the reminder.
Mwana Africa said the shares would be paid out of future dividend earnings.
BCSOT secretary Savie Munoriarwa, told a Parliamentary portfolio committee on indigenisation and empowerment that in the interim, a “pre-advance payment” was approved to allow community projects to commence while the legal agreements were being worked out.
Funds remained with Freda and would be released to suppliers on submission of payment vouchers.
“Projects funds have not been released into the Trust account pending signing of agreements with the qualifying business partner to formalise funding arrangements,” she said.
She said the legal documents were sent to Attorney General’s office last November through the youth and indigenisation ministry for consideration and approval and were later forwarded to the Public Agreement Advisory Committee, which has yet to approve them.
“All the other smaller challenges stem from this major challenge,” Munoriarwa said, adding that without the agreement no draw-downs could be made.
As at March 31, a total of $1,1 million was utilised from the facility.
The trust has so far spent $376,000 on assets, $287,000 on education, $168,800 on health, roads $96,800 and water $80,000. Administration costs accounted for $48,000 and consumables and bank charges $36,900.Advertisement
The board was criticised for not having a proper needs assessments plan after Munoriarwa, who is also the Bindura Rural District Council chief executive told the committee that they meet monthly and paid $100 in sitting allowances which were reviewed from $10.
Additionally the secretary received $100 airtime allowance per month while other board members got $30.
Responding to questions from members of Parliament on whether there were payment standards, the National Indigenisation and Economic Empowerment Board (Nieeb) regional manager for Mashonaland Central, Godfrey Chingono said these were yet to be circulated to the trust.