HARARE — In an effort to bolster the growth of startups and small-to-medium enterprises (SMEs), Zimbabwe’s National Venture Capital Fund (NVCF) is seeking strategic partnerships with high-net-worth individuals.
The NVCF, established in 2021, aims to provide capital to these businesses in exchange for equity but has struggled to gain momentum due to the government’s constrained fiscal space.
During a panel discussion at the 7th Southern African Development Community (SADC) Industrialisation Week held in Harare last week, Deputy Minister of Finance, Economic Development, and Investment Promotion David Kudakwashe Mnangagwa emphasized the need to expand ideas and businesses for startups. He acknowledged that the NVCF has remained stagnant since its inception, largely due to the absence of a chief executive officer with private sector experience who understands the needs of entrepreneurs.
However, Deputy Minister Mnangagwa expressed optimism about the fund’s future, stating, “We are getting there because now we have the leader who is going to push it forward.” This renewed leadership is expected to drive the fund towards its goals of supporting startups and SMEs.
The Reserve Bank of Zimbabwe’s 2022 FinScope MSME survey revealed that the informal sector in Zimbabwe had an estimated annual turnover of US$14.2 billion and a gross domestic product (GDP) valuation of US$8.6 billion. This highlights the significant potential for growth and investment in the country’s startup ecosystem.
The NVCF aims to tap into this potential by providing much-needed capital to startups and SMEs, which are critical drivers of economic growth and job creation in Zimbabwe. By partnering with high-net-worth individuals, the fund hopes to leverage their expertise and resources to support the development of innovative and high-potential businesses across various sectors.
As the NVCF progresses with its plans to operationalize the fund, it will be crucial for the government to address the challenges faced by startups and SMEs in the country.
These include access to finance, regulatory hurdles, and infrastructure constraints. By fostering a supportive environment for entrepreneurship and innovation, Zimbabwe can unlock the full potential of its startup ecosystem and drive sustainable economic growth for the benefit of all its citizens.