Towards a Robust, self sustaining economic empowerment financing paradigm
Date
2013-05-07
Authors
Habasonda, Mwanakwale Caiaphas
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Abstract
A study of Citizens Economic Empowerment Act CEE Act and the National Assembly Bill debated in run up to the enactment of this statute reveals a gap that needs to be filled with respect to the economic empowerment financing framework. While the failure to deliver of past empowerment financing fi-ameworks is a an issue to be explored in this study, the lack of a detailed legal formulation of the empowerment financing paradigm- in the current CEE Act is a serious omission in the law. The law creates an Empowerment Fund that lacks depth in terms of legal, operational and regulatory structure. The lack of depth poses a threat to the success of the Fund be compared with those of the Banking and Financial Services Act, (BSFA) 1996, which sets out in considerable detail, the modus operandi and the legal and regulatory framework of the banks and financial institutions under Bank of Zambia supervision. For all intents and purposes and given the amounts of funds envisaged, the Fund should have been set up as financial institution in its own right. The Fund, at K150 billion, at the latest mention, is arguably larger than the minimum capital base of Zambia's commercial banks combined. The management of such huge funds as shall be handled by the Fund, has implications in the economy. A more rigorous risk management and control framework should have been formulated. This dissertation suggests an alternative formulation which could be considered as opportunities for amending the provisions relating to the empowerment Fund present themselves.
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Sustainable Development , Finance, Public-Zambia , Special Funds