At the recent SADC Industrialization Week, Zimbabwe made a groundbreaking announcement through the Honorable Deputy Minister of Finance: appointing a National Venture Capital Fund CEO. This is a very positive development for Zimbabwe’s entrepreneurial ecosystem, signalling a renewed focus on fostering innovation and supporting emerging businesses.
While this move is encouraging, it is important to recognize that Zimbabwe already has several financial institutions aimed at supporting entrepreneurship. These include the Industrial Capital Fund by IDC, the SME Revolving Fund by SMEDCO, Empowerbank, Zimbabwe Women’s Microfinance Bank etc. If the performance of the above institutions tells a story, it is that 1, the government cannot do it alone, and 2, there may be a need to consolidate efforts for better impact.
Additional strategic initiatives are essential to maximize the impact of the National Venture Capital Fund and accelerate the growth of a robust, private-sector-led entrepreneurial ecosystem.
Key Steps to Strengthen the Ecosystem may include
1. Establish a Venture Board on the ZSE or VFEX — Creating a dedicated venture board on the Zimbabwe Stock Exchange (ZSE) or Victoria Falls Stock Exchange (VFEX) would provide a platform for startups and high-growth companies to access capital and gain visibility. This could attract both local and international investors, creating a more dynamic and supportive environment for innovation.
2. Introduce Corporate Venture Capital Incentives — Zimbabwe could take inspiration from countries like Japan, where corporate venture capital (CVC) is incentivized through tax benefits and other policy measures. Encouraging large corporations to invest in startups not only provides crucial funding but also fosters collaboration between established businesses and emerging entrepreneurs, driving innovation across sectors. Companies. This could even be part of a commercialization roadmap for innovation outcomes, especially from university hubs.
3. Consider enacting a Startup Act to replace the SME Act. — I have previously written about this and it is clear the SME Act has been superseded by progress; it was valuable in the past but no longer addresses the needs of contemporary entrepreneurship. This will be aimed at providing business and fiscal conditions necessary to allow startups an opportunity to scale without the burden of expectation. At present innovation and experimentation is expensive, and failure is fatal.
4. Consolidate efforts — Building in silos has already proven to be ineffective. As the old saying goes, “One finger cannot crush lice.” New ventures and small businesses need a credible pathway tailored for each stage of their existence whether it is at ideation, prototyping, launch, scale, maturity or exit. The existing institutions, including the National Venture Capital Fund, must interact and leverage each other’s core competencies & strengths to create a cohesive support system for entrepreneurship.
By implementing the above, Zimbabwe can further enhance its entrepreneurial ecosystem, ensuring that the National Venture Capital Fund and other existing initiatives (including from current actors who include corporates, development partners and NGOs) work synergistically to support the next generation of Zimbabwean entrepreneurs.
Ecosystems win the day, any day, all day!
Video Credit: Zimpapers Television Network
Disclaimer; this article represents the personal opinions of the author and is not in any way representative of the institutions and brands I may be associated with.
Source: The Medium