Africa Moyo, Harare Bureau
THE African Export-Import Bank (Afreximbank) is working on a financial package in the region of US$70 million for the local manufacturing sector.
This was revealed by Industry and Commerce Minister Nqobizitha Mangaliso Ndlovu last Friday during the launch of the Zimbabwe National Industrial Development Policy (ZNIDP) in Harare. “We are in dialogue with Afreximbank so far and they indicated that they are putting together a package similar in form to the US$70 million they availed us around 2014 and we are expecting to finalise discussions around that,” said Minister Ndlovu.
The facility, which is critical for industry to ramp up production and create more jobs in pursuance of Vision 2030 of creating an upper middle income society, is one of the many options Government is pursuing to ensure industry gets cheap, medium to long-term funds.
The absence of affordable finance has been a major headache for local firms since 2009, resulting in most of them operating at sub-optimal levels.
National Business Council of Zimbabwe president Mr Langton Mabhanga yesterday said if the Afreximbank facility was obtained, it should be channelled towards improving production efficiencies in the manufacturing sector.
“In the face of electricity outages, the demand for efficiencies is becoming more exerting for the manufacturing sector,” he said. “Hence, the prospective US$70 million for industry could be channelled towards tackling productivity deficiencies to enhance competitiveness.
“Industry will need to decommission obsolete machinery, replacing it with compact, agile and better energy efficient equipment. Energy management strategies and more modern switchgears will be imperative for power optimisation. “The tides of regional economic integration require our industry to be primed for competition, thus the US$70 million facility will be both opportune and strategic.”
Minister Ndlovu said beyond external sources of financing, Government planned to promote a culture of savings in the country so that some of the funds could be channelled to industry. The ZNIDP, among other things, seeks to promote a culture of savings.
“We also expect that as the nation promotes a culture of savings, we should be able to create additional sources of funding from internal sources,” said Minister Ndlovu.
“I believe as a country we have enough reserves to fund start-ups, to fund industrial growth. We are going to have a Committee (as part of the ZNIDP and Local Content Policy Strategy) that will come from the private sector. This committee will be charged with making sure that it constantly advises Government on recommendations to pursue strategies to use, in promoting local content. We will also go a step further in promoting the consumption of proudly Zimbabwean products.”
Minister Ndlovu said the Committee will also look for funding for the industrialisation agenda as a key strategy that has to be pursued. The Cairo-headquartered Afreximbank has extended up to US$7 billion to local firms in the public and private sectors in the past.