adminCabinet passed the decision to bail out Bulawayo firms, which warned the country’s largest city was de-industrialising rapidly due to financial constraints. CZI has thus urged Finance Minister Tendai Biti to publish the disbursement criteria and conditions in two weeks and release the funds before year-end.
The country’s most powerful business advocacy body has suggested that the fund should benefit firms within a 50km radius of Bulawayo. But CZI wants a clear definition for a manufacturing industrial firm — its suggestion being an enterprise in manufacturing, processing and value addition.
It wants beneficiaries to be registered under the Companies Act and 70 percent of their operations, plant and equipment to be within 50km of Bulawayo Post Office.
CZI president Dr Joseph Kanyekanye said Government should immediately adopt the suggestions as they would benefit the most affected stakeholders.
“The companies should currently be operating and employing staff, but are facing challenges of inadequate operating capital and poor cash flows, resulting in low capacity utilisation and failure to break even,” he said.
He added that beneficiary firms should demonstrate potential to restore capacity utilisation and upgrade technology while searching for solutions. Dr Kanyekanye added that CZI wanted the beneficiary firms to demonstrate their preparedness to comply with indigenisation requirements, ability to repay debt and being competitive locally and regionally.
The confederation wants funds under the facility to be extended at an interest rate of less than 15 percent per annum and also allow four months grace period for re-equipment. It wants the firms that access the fund to seek a court order barring creditors from siphoning out the money advanced under Dimaf.
“The fund beneficiaries will not be allowed to pay dividends, make salary hikes that exceed the inflation rate for senior management or purchase luxury cars during the tenure of the loan repayment,” said Dr Kanyekanye.
The loan repayment period should be two years inclusive of the two-four months holiday after disbursement of the funds. He said the funds must be disbursed on a pro-rata basis in the event they are not sufficient and should be advanced through a bank selected through tender.
Online Reporter