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Zimbabwean companies will be able to purchase equipment from India through a $100 million credit facility that the Asian country has availed, a Cabinet Minister has said.Industry and Commerce Minister Mike Bimha said government would be the guarantor to the local companies seeking to utilise the facility.
“I am happy to report that, two weeks ago I went to India to the Africa India summit and Zimbabwe managed to be one of those countries which will benefit from what is called the buyer’s credit. It is a $100 million facility which will be available for industry,” he said.
Minister Bimha said interested local companies would place orders of either equipment or machinery from Indian companies and the Indian government would pay the Indian companies.
“And the role that government will play is that of a guarantor. And I am happy to report that in my discussions with Finance Minister Patrick Chinamasa that is already in place,” he said.
“So that facility will also fall within the industrial funding,” he said.
Zimbabwe needs at least $10 billion to revive its distressed manufacturing sector.
Early this month Small and Medium Enterprises Development Minister, Sithembiso Nyoni invited Indian companies to partner it in “kick-starting” the country’s agricultural development.
“I’m advocating that you come and accompany some of our farmers in food production, in maximising the output from the land,” Minister Nyoni said at a plenary on “India Inc support in creating affordable food security in Africa” at the on-going 10th CII-Exim Bank conclave on India-Africa Project Partnership.
“Let us have joint ventures so that we can make our countries great,” she said, pointing out that illegal sanctions on Zimbabwe over the past decade had caused a decline in the agriculture sector.
According to the 2013 Confederation of Zimbabwe Industries manufacturing survey released last week, capacity utilisation dipped in the year to September last year from 44,2 percent to 39,6 percent due to lack of affordable credit lines, ageing equipment coupled with acute power and water shortages.
The government has since 2009 taken various initiatives aimed at reviving industries but lack of funding has crippled the efforts.
In 2010, government in collaboration with Old Mutual launched a $40 million Distressed and Marginalised Areas Fund (Dimaf) meant to spearhead the revival of the country’s industries.
Lack of lines of credit has made it difficult for local companies to retool and remain competitive in the face increased competition from imports. — New Ziana/Business Reporter
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