Sundaymail EditorTawanda Musarurwa
Senior Business Reporter
Treasury has injected $30 million into the Industrial Development Corporation of Zimbabwe (IDCZ) as the institution moves to play a greater role in development financing.
The IDCZ was established in 1963 through the IDCZ Act (Chapter 14:10), which allows the Corporation to promote investment and economic co-operation across all sectors.
The Corporation currently holds investments shareholding in various companies including Chemplex Corporation, Modzone Industries, with foreign direct investment partners like Italians in dimension stone mining and processing, Indians and Singaporeans in Surface Wilmar Investments and Olivine Holdings or agro industry, Chinese in cement, and Iranians at Modzone and Motira.
The state firm is also in agreement with local conglomerates TA Holdings at Sable chemicals and the Zimbabwe Fertilizer Company. These are major economic enablers and at full throttle has potential to provide quick wins in reviving the economy.
But in line with Government’s moves to restructure its parastatals and State enterprises, the IDCZ has been reducing shareholding in several of these subsidiaries. Finance and Economic Development Minister, Professor Mthuli Ncube recently said Government wants the Corporation to play a bigger role in development financing.
It had initiated the process with a $30 million seed capital injection.
“With IDCZ, we have resumed IDCZ’s role as a development finance entity and injected resources of $30 million seed capital that will then be used for developing new industries in Zimbabwe,” he said.
“That is a role of the IDCZ that we have unbundled and we feel that needs to come back.”
IDCZ’s mandate includes establishing and conducting any industrial undertaking, facilitating promoting, guiding and assisting the financing of new industrial undertakings (including small and medium scale), schemes for the expansion, better organisation and modernisation of and the more efficient carrying out of operations in existing industries and industrial undertakings; as well as implementing Government policy in regard to decentralisation of industry, choice of technology and any other matter which the Minister (Minister of Industry and Commerce) may specify.
The Corporation also undertakes the development of management and technical expertise in the carrying out of industrial undertakings; and takes measures to acquire direct and effective control of its investments and to that end to ensure that industrial development in the country are planned, expedited and conducted on sound business principles.
The Treasury boss highlighted the shareholding reduction in IDCZ’s automobile subsidiary, Willowvale Motor Industries, as a case in point.
“Also we have decided to lower our equity as Government in Willowvale, the car assembly company, to make sure that there are other partners who can come in and inject capital and I am sure that over time, we will get suitors for that equity stake.”
IDCZ has already commenced the process of disposing of its controlling shareholding in its under-performing automobile firms, Willowvale Motor Industries and Deven Engineering. The Corporation owns 91 percent of WMI and 100 percent of Deven.
IDCZ recently issued a statement last week inviting suitors to dilute its interest up to 74 percent in each of the automobile assemblers, as it seeks to exit the companies to allow new investors to come in and inject requisite fresh capital.
Restructuring of State enterprises and parastatals is an integral element of extensive reforms envisaged under Government’s two-year economic blue-print, Transitional Stabilisation Programme (TSP) (2018-2020).
Online Reporter
Tinaye Agere