Pamela Shumba, Senior Reporter
THE $30 million allocated for industry in the 2019 budget is not enough to meet the sector’s requirements and Government is exploring other financing packages and partnerships to bridge the non-availability of capital and assist industry retooling and modernisation, a senior official said yesterday.
Addressing delegates at the Confederation of Zimbabwe Industries (CZI) breakfast meeting in Bulawayo, Industry and Commerce Deputy Minister Raj Modi said unlocking value in the country’s manufacturing sector was critical so as to promote trade and investment. He noted that the country had become uncompetitive in external markets hence the need for companies to remodel their production processes. “As Government we’re concerned about the non-availability of adequate and affordable funding to assist businesses to retool and modernise, which are key competitive tools if business is to compete in this global economy,” he said.
“Hence it was found prudent that we restructure the Zimbabwe Industrial Development Corporation (IDC), from being an institution that was investing in greenfield areas to a development finance institution, to help unlock value in our industries.” Deputy Minister Modi said under the 2019 budget, Government has availed funding for this purpose to support the retooling programme.
“It’s my expectation that companies that are seriously looking to expand production and venture into export markets will consider this facility. Emphasis will be placed on efficient utilisation of these funds and it’s critical at this juncture that while other countries and financial institutions have demonstrated willingness to extend lines of credit to the private sector, we reflect highest levels of business ethics and financial discipline particularly on the utilisation of such loan funds and repayment thereof,” he said.
Deputy Minister Modi added that this has ripple effects of unlocking yet more funding, which the country needs at this point.
“We’re also exploring possible partnerships with local financial institutions like pension funds and insurance companies for possible crowd funding of this facility to enable mobilisation of more resources. I know that $30 million allocated through the budget is not adequate to meet all requirements of supporting industry, hence the engagement of a number of development partners who include Afrexim Bank to support exporting companies.
“We’re looking at finalising the process to allow beneficiaries to access the funds and utilise them to improve our export capacity. We need to generate foreign currency to fund our critical imports and this facility, once accessible, companies are encouraged to utilise it fully,” he said.
Deputy Minister Modi said Government will continue to look for other avenues to assist industry and engagements with its regional partners were at various stages. Similar efforts have also been extended to South Africa with the Development Bank of South Africa. “South Africa is our biggest trading partner and most of our inputs are sourced from the market. We would want to see industry retooling and using updated technology in the production of goods. Priority will be given to exporting companies for this facility and progress has been made in identifying potential beneficiaries,” he said.
“In the recent past, we have witnessed President Mnangagwa visiting a number of countries to promote and market trade and investment opportunities in Zimbabwe”.
The Deputy Minister said Government will continue to provide an enabling environment for business to grow and expand adding that critical reforms were being implemented and his ministry had prioritised ease and cost of doing business reforms which have seen Government making strides in establishing a One Stop Investment Centre to spearhead the development of Special Economic Zones. The meeting was organised in conjunction with the Zimbabwe International Trade Fair (ZITF), under the theme “Promoting Trade and Investment through business linkages”. It was attended by delegates from Botswana, South Africa and various organisations. — @pamelashumba1