Companies in the city as are in dire need of financial assistance. Biti is expected to make the presentation next month.
The industrial sector in Bulawayo is reeling under the serious liquidity crunch and capacity utilisation for most companies is still below 45 percent with 87 companies having been closed and 20 000 jobs lost.
Zimbabwe National Chamber of Commerce past President, Obert Sibanda, said companies in Matabeleland needed fresh capital injection.
“The minister should identify areas that will stimulate growth, like infrastructure development.
“The should take Matabeleland as a special case that needs urgent attention,” said Sibanda.
He said duty on raw materials should also be reduced so that local companies can compete effectively, and called for export incentives.
The Association of Business in Zimbabwe called on the minister to revisit the statutory instrument on customs rebates.
In a statement Abuz said the minister's stance on the instrument was ill-advised given that it was not in tandem with Southern African Development Community trade protocols.
The Statutory Instrument regulates customs duty rebates at 20 percent for products like steel tubing. Before that, the products enjoyed exemption.
"The current rate of duty on steel tubing, as regulated by S.I.132, is 20 percent. Prior to S.I. 132, importation of this product enjoyed a zero percent rate of duty. The general rate, outside of SADC, of duties for importation of this product is 15 percent," Abuz said.
Statutory Instrument 132 suspends previous SADC duty rebates on selected products, especially those manufactured by South African companies.
Despite being enacted on the 23rd of July 2010 it was only enforced in February 2011.
The association also contends that the instrument says an importer may import steel tubing from say China or any other country, besides South Africa, at 15 percent duty.
However if one imports the same product from a South African manufacturer, despite being SADC compliant, one now pays a whopping 20 percent duty, a situation that Abuz says is not sustainable and needs to be corrected.
These are some of the issues that the midterm budget statement is expected to address so that companies can remain viable. The ZNCC branch manager, Bulisani Ncube, said industry was desperate for working capital to retool.
“Local goods cannot match those that are coming from other countries because they are cheap. Our companies cannot produce goods that are cheap because of the reasons related to production costs. The machinery that most companies use is obsolete and there are a lot of overheads,” he said.
“Companies need new machinery. Old machines will always make it difficult to achieve more than 50 percent capacity utilisation. Long-term loans are needed.”
Post published in: Business