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Midlands Bureau Chief
GOVERNMENT has directed through its economic blueprint, Zim Asset, the Industrial Development Corporation of Zimbabwe (IDCZ), to pursue its financing developmental role and help revive industries.
Addressing captains of industry at a Confederation of Zimbabwe Industries dinner held at a hotel in Gweru on Thursday, the Minister of Industry and Commerce, Cde Mike Bimha, said the Government would in part help mobilise funds for industrial revival through utilization of financial instruments and direct negotiations for funding with international funding institutions such as IDC of South
Africa and China EximBank, among others.
Zimbabwe needs a minimum of $2 billion to breathe life into its industry.
Minister Bimha acknowledged the failure of the Distressed Industries and Marginalised Areas Fund (Dimaf) and ZETREF in reviving industries owing to the short tenure of the loans and high interest rates.
“The IDC of Zimbabwe should pursue its mandated financing developmental role with funding mobilized in part by Government, utilization of financial instruments and direct negotiations for funding with international funding institutions such as IDC of South Africa and China EximBank.
Existing facilities such as DIMAF and ZETREF have had limited impact due to the short tenure of the loans and the high interest rates.
Furthermore, the limited combined resources envelope of at least $110 million against an industry minimum requirement of $2 billion, contributed a measly one percent of the industry’s requirement,” he said.
Min Bimha said the Government was also engaging extensively with the private sector in its bid to revive the economy through industry.
The Minister is on a tour of provinces to assess the state of industries in the country.
He said the tours will help him and his team to appreciate firsthand the challenges facing industry while also allowing industry to present its concerns and input to Government through the ministry.
“Though the challenges that are bedevilling our industry tend to be generic in nature, such as absence of affordable long-term finance, power shortages, etc, there are certainly other challenges that are specific and particular to your part of the region that require specific intervention rather than apply a one-size-fits-all approach.
“We should think outside the box. As industry you have a role to play in the economy. You cannot afford to take a back seat because we are in this together,” said Min Bimha.
The Minister and his team yesterday managed to tour key industries in Gweru ― Bata Shoe Company, Zimglass, Zim Alloys and Metal Box.
All the above companies are either performing below capacity or have since ceased production owing to a cocktail of challenges, operational capital being chief among them.
At Bata, Min Bimha was told that the giant shoe company was operating at 40 percent.
Management said Bata Shoe Company used to produce 10 million pairs of shoes per year with a workforce of 5 000.
The figures have since dwindled to two million pairs of shoes annually and now employs 1 500 workers.
Min Bimha was told that Bata was working on increasing capacity utilization to 60 percent and ramp up production to three million pairs per year.
The company was facing challenges in sourcing quality raw hides as local cattle ranchers were exporting their hides.
On his part, the minister promised the Bata management to implement the proposed levy on the exportation of raw hides which was starving tanners of their basic raw material and the shoe manufacturers of locally produced and value added leather.
“I can confirm that your proposal on raw hides is currently under active consideration and you will be advised of its outcome shortly. I am also glad and indeed want to commend management at Bata for tirelessly working with my Ministry, ITC and COMESA in crafting the Leather Strategy which we launched this year in Bulawayo,” he said.
At Zim Alloys, which is the biggest chrome ore processor in the country, the Minister and his team learnt that the company has since ceased operations owing to depressed commodity prices, working capital shortages and high electricity charges.
Min Bimha said the Government was hamstrung on the issue of prices as the country had “virtually no control over the dictates of international commodity markets”.
“I regret to tell you that Zimbabwe like many developing countries exporting commodities, we are simply price takers. Government’s hands are tied as these are internationally determined prices.
“What we can do though is to encourage beneficiation and where feasible enact legislation to compel value addition right through the whole value chain as enshrined in our IDP and the recently approved Zim Asset blueprint,” he said.
Minister Bimha and his team promised to return to the Midlands and tour key industries in Kwekwe.
Online Reporter