adminThe CZI which represents the manufacturing sector in the country said the proposed criteria was meant to ensure transparency in the disbursement of the $40 million.
The Government is yet to release the $40 million meant to revive ailing industries in Bulawayo.
In a statement, CZI said the fund should target revival of industries in the manufacturing sub sector in Bulawayo which it said was in harmony with the original public expectations.
“CZI believes there should be a clear definition of a manufacturing industrial firm in Zimbabwe. This being an enterprise involved in manufacturing, processing or value adding, duly registered under the companies Act; has been in existence for at least three years and has at least 70 percent of its operations, plant and equipment or asset base or workforce located within a 50 kilometre radius of Bulawayo.”
The industries’ representative body said potential beneficiaries should also be presently 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.
CZI also suggested that the prospective beneficiaries should demonstrate the potential to restore capacity utilisation and upgrade technology while searching for solutions.
In addition, CZI said the scheme should be directed to large manufacturing firms affiliated to the body and are prepared to comply with indigenisation requirements, ability to repay debt and being competitive locally and regionally.
The body said Dimaf resources should be accessed at an interest rate of less than 15 percent per annum and also for the facility to allow four months grace period for re-equipment.
CZI wants manufacturing firms that access the fund to seek a court order barring creditors from siphoning out the money advanced under DIMAF.
The body also hopes that “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.”
The loan repayment period should be two years inclusive of the two-four months holiday after disbursement of the funds.
CZI also wants the funds to be disbursed on a pro-rata basis in the event they are not sufficient and should be advanced through a bank selected through tender.
In May this year, Government established an eight-member Inter-ministerial Taskforce on Let Bulawayo Survive Campaign chaired by Industry and Commerce Minister Professor Welshman Ncube to investigate challenges that led to the demise of industries in the city.
Among some of its findings, the taskforce noted that the de-industrialisation of Bulawayo was as a result of obsolete equipment in the manufacturing sector as well as working capital constraints needed to revamp productivity following the adoption of a multi-currency system in February 2009.
The taskforce also recommended to Cabinet that Government should urgently release funding to bail out Bulawayo industries because in the past few years owing to operational constraints at least 87 firms had closed down while others scaled down operations resulting in more than 20 000 workers becoming redundant.
Online Reporter