Manufacturers seek US$250m for recapitalisation

and the African Development Bank to raise about US$250 million under its five-year recapitalisation plan.
The IFC is an affiliate of the World Bank.
The sector, now operating between 35 and 45 percent capacity utilisation, requires an estimated US$2,3 billion to operate at full throttle.
Confederation of Zimbabwe Industries president Mr Joseph Kanyekanye said the IFC had sent a delegation to Zimbabwe to study the sector and come up with a funding model.
“We have several initiatives with these financial institutions and we have since indicated to them that there is no reason not to invest in Zimbabwe,” said Mr Kanyekanye.
The manufacturing sector was also expected to benefit from the US$76 million facility from Botswana, as 70 percent of the funds would be directed towards the manufacturing sector at less than 9 percent interest.
Mr Kanyekanye said the Botswana facility would help them access additional funding from South African banks, buoyed by the bilateral agreement which exists between the two countries.
“We had a meeting with the responsible Zimbabwe and Botswana ministers,” he said. “It is now our hope that Finance Minister Tendai Biti and his counterparts would come up with the disbursement modalities in the shortest possible time.”
Demand for loans from firms within the sector has increased by more than 40 percent since last January.
Although the manufacturing companies’ productivity remains subdued, the CZI is also calling upon Government to consider a financial rescue package for them with a view to boosting the availability of locally produced goods in in the local markets.
Last year the manufacturing sector production was said to have peaked at 47,3 percent as the economy progressed in the recovery mode.
But major constraints to capacity enhancement remain largely unchanged, compounded by lack of working capital, antiquated plant machinery, which has resulted in loss of time due to machinery breakdowns and low demand.
This saw output reduced by between 50 and 60 percent between 2000 and 2008, according to estimates.
Meanwhile, Zimbabwe and South Africa are next month expected to resume talks on a R2 billion loan facility pledged by the latter when they signed a bilateral agreement in November 2009.
Economic Planning and Investment Promotion permanent secretary Dr Desire Sibanda recently said that Government would next month send a delegation for talks with the South Africans over the agreement.
The meeting is expected to provide a chance to engage the South African business community in enhancing and exploring new avenues of trade.