“It’s very difficult at any point in time to give a specific figure on how much is needed to revamp the entire sector. As you might be aware companies are closing while others are opening. At the moment the ministry cannot give a figure,” said Bimha responding to a question from The Zimbabwean during a recent meeting organised by the Confederation of Zimbabwe Industries.
His remarks raised concerns among captains of industry, who demanded to know how the government could be in a position to breathe life into ailing sector if it had no clue about the amount required.
Last week, the National Social Security Authority revealed that 10 companies were closing every month since January, while 2,893 companies reportedly folded last year.
Previous interventions by government to resuscitate the sector, which is operating below 40 percent of capacity, failed to yield positive results.
Started in 2011, this took the form of the Distressed Industries and Marginalised Areas Fund, DIMAF, and was meant to fund the retooling of industries. But it only benefited 48 companies.
Harare, Chegutu, Marondera, Victoria Falls, Masvingo and Kadoma were some of the beneficiaries while Mutare, which is the hub of the economically strategic timber industry, was snubbed.
Bimha said DIMAF suffered from shortcomings, which he attributed to loopholes in the industrial development policy.
“Before Zim-Asset, we had an industrial development policy, which mentioned that government would set up an institution for industrial funding. But it didn’t say who was going to do it, whether it was a new institution or an existing on. The policy simply said government wanted to set up an institution to fund industry.
“We were overtaken by events and Zim-Asset came on board. Zim-Asset also addresses the same issue but it goes further to say they want the Industrial Development Company to facilitate the funding of industry, as much as we have Agribank facilitating the funding of agriculture,” explained Bimha.
He insisted that government had recommitted itself by tasking the Industrial Development Company of Zimbabwe to set up a fund for distressed companies. “We are now reconfiguring IDC, so that it is in the process of getting rid of some of its entities and also looking for partners for other entities.
“It’s more of going with the old IDC but we are also bringing up another wing of IDC, which will be more like a fund management company and will now facilitate the funding of industry,” he said.
The minister hastened to point out that DIMAF would not be disbanded but would run concurrently with the new fund management company.
The IDC, which is spearheading the establishment of the new fund, has been disposing of 10 of its subsidiaries in a bid to raise funds to finance the retooling of struggling industries. The general manager, Mike Ndudzo, confirmed the development early this year before a Parliamentary portfolio committee.
He told the committee the company’s board had voted for the disposal and dilution of subsidiary companies in order to realise some capital value.
Zimbabwe Grain Bag, Almin Metal industries, Surface Investments, Sunway City, Stone Holdings, Modzone Enterprises, Zimbabwe Copper Industries, Zimglass, Allied Insurance, Deven Engineering and Amtec are the companies up for disposal.
Bimha said the fund will work closes with various stakeholders such as the CZI, Zimbabwe National Chamber of Commerce, Reserve Bank of Zimbabwe and Finance Ministry.
Post published in: Economy
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