daniel chigunwe
Oliver Kazunga
COMPANIES say they are still to access US$22,5 million set aside by the Government from the Special Drawing Rights (SDRs) to support the manufacturing sector with capital for retooling.
The US$22,5 million was allocated to the industry retooling for equipment and replacement for the value chain revolving fund as part of the US$80 million the Government apportioned to the productive sectors from the SDRs.
Zimbabwe received nearly US$1 billion SDRs equivalent as part of a general allocation of US$650 billion the International Monetary Fund released to the multilateral institution’s member countries globally.
From the US$80 million, other sectors such as tourism were allocated US$7,5 million, the horticulture revolving fund (US$30 million) while US$20 million was set aside towards the development of irrigation facilities for smallholder farmers especially those focusing in the export sector.
In 2022, the Treasury said companies seeking to access the funds from the SDRs allocation needed to apply through participating banks, which will then conduct normal credit assessments and due diligence through the risk sharing and co-financing models.
Thus applications would include a letter of support from the line ministry and the approved applications were then required to be forwarded to the Treasury through line ministries for final approval.
In a recent interview, the Confederation of Zimbabwe Industries (CZI) president, Kurai Matsheza, told this publication that not any of their members accessed funding from the US$22,5 million industry retooling for equipment and replacement for the value chain revolving fund.
“None of our members has received funding from that US$22,5 million allocated to industry from the SDRs.
“We tried to follow it up with the Treasury, but we are not getting clear answers and we really do not know what is holding the release of those resources,” he said.
Matsheza stressed that although the said funding is not adequate to cover the entire industry individual companies’ requirements, the resources would address some of the challenges facing the firms.
CZI has not ascertained how much the entire manufacturing sector requires to facilitate retooling initiatives as such data is difficult to gather and varies from time to time depending on individual companies’ funding requirements.
Businesses including those in the productive sector have of late been scouting for funding to facilitate the importation of capital equipment to retool and procure the much-needed raw materials to improve their operational inefficiencies and boost output.
This is against a backdrop of most firms and businesses operating with obsolete plant and machinery causing constant breakdowns and ultimately with a knock-on adverse effect on productivity.
Professor Mthuli Ncube, Finance, Economic Development and Investment Promotion Minister and his deputy David Mnangagwa, would not be reached for comment yesterday as their mobile phones went unanswered.
Efforts to get a comment from the Ministry of Finance, Economic Development and Investment Promotion Permanent Secretary George Guvamatanga were unsuccessful as he had not responded to written questions sent to him.
However, in a recent interview, Industry and Commerce Minister, Mangaliso Ndlovu said: “It’s difficult to tell because these are private transactions with the Treasury providing the guarantee under the SDRs.
“We have not done a survey to assess if anyone has utilised the facility, it’s something that some have raised as a concern.
“I am yet to really be fully briefed on how it was or is structured of course, I was part of the launch representing tourism where we had said its really between the applicant and his or her bank, but then requiring Treasury concurrence.
“So, it might require a survey to check if companies have been able to tap into that.”
Bankers Association of Zimbabwe president, Lawrence Nyazema, said he needed time to check with respective banks as such facilities were done at bilateral level.
“So, maybe the best way is to say, if the Treasury or the Ministry of Finance is able to give you a breakdown of what went where, I can then talk to our member banks because there have been 17 of us.
“And if the transactions were done bilaterally, we would then have to declare that we were the ones who participated.
“But what I can say is that we did participate in the horticulture fund. We also participated in the tourism fund.
“Initially, we wanted the liquidity for the funding, but what then came was guarantees and I suppose guarantees are good enough in that, the Government is saying, if the project fails, we will make good the exposure that we have,” he said.
Meanwhile, CBZ has secured a US$80 million loan facility from the African Export-Import Bank to support trade financing for Zimbabwe’s productive sectors of the economy as well as for capital expenditure financing.
In a joint statement released last week, CBZ and Afreximbank said the facility had a tenure of three years with an option to roll over for another two years.
According to CBZ, US$60 million will support prime exporters and SMEs involved in the export value chains across key sectors that require financing for asset or machinery acquisitions.
The facility will also support exporters and SMEs with working capital to facilitate inventory, supply chain, pre-export, and post-export business activities in Zimbabwe.
The balance of US$20 million will support Afreximbank Trade Facilitation Programme Facility (AFTRAF), a non-funded line of credit to facilitate the issuance of guarantees and letters of credit.
Bongani Ndlovu