Dimaf inadequate: CZI

In an interview, the president of the Confederation of Zimbabwe Industries (CZI), Mr Kumbirai Katsande said the facilities which include the Distressed Industries and Marginalised Areas Fund (Dimaf) and Zimbabwe Economic Trade Revival Facility (Zetref) and credit facilities from neighbouring countries will be inadequate to resuscitate industry which is affected by numerous negative factors.

“Every body acknowledges lack of funds to allocate to the revival of the manufacturing   industry so there is a need for the Government to  out-source foreign direct investment and approach international financial institutions to allocate more funds to our ailing industries,” said Mr Katsande.

He said firms need funds to replace obsolete machinery which results in low production especially in the manufacturing sector.

“Last year we saw that the financial facilities by Government through the Distressed Industries and Marginalised Areas Fund and Zimbabwe Economic Trade Revival Facility failed to revive industry mainly because of the slow rate of disbursement of funds by banks,” said Mr Katsande.

He said the Government should also be aware that the revival of the industrial sector depends on the energy sector.

“Power outages are one of the negative factors triggering the decline of production in industry resulting in low profit margins. The money is not enough since it is coming from a small pot. The manufacturing sector requires significant investment to improve its competitiveness through retooling and new advanced technology,” he said.

Mr Katsande said the CZI welcomed the Government’s move to implement cluster initiatives to enhance value addition, competitiveness and development through capitalising on proximity of production, procurement and marketing synergies through supporting existing companies.

Presenting the 2013 National Budget recently, the Finance Minister, Tendai Biti decried the low rate of disbursement of funds by banks and the high interest rates they charge.

“Since the launch of $40 million Dimaf, project approvals amount to $16 million while disbursements are at $12 million. The rate of disbursements has since improved and we expect that by the end of 2012, the first $20 million will have been fully disbursed,” said Minister Biti.

He said next year’s budget would focus on restoring  the manufacturing sector through enhancing competitiveness in both foreign and domestic markets through pursuing various facilities.