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Sikhulekelani Moyo, Business Reporter
BULAWAYO-based textile company, National Blankets, expects to benefit from the retooling package allocated to the sector by the Treasury under the Government’s Special Drawing Rights (SDRs) allocation towards the cotton value chain.
Zimbabwe was allocated SDR677 million (US$958 million equivalent) by the International Monetary Fund (IMF), which is part of the SDR’s General allocation of US$650 billion that was released last year to all IMF member countries.
It is from these resources that Treasury channelled part of the funds towards supporting key economic sectors such as horticulture, industry retooling, tourism and small holder farming irrigation systems.
A total of US$80 million has been set aside for productive sector funding and Government has invited local businesses to start accessing the money to boost the country’s economy.
The breakdown of SDR disbursements towards the productive sector includes; a US$30 million horticulture revolving fund, US$22,5 million industry retooling for value chain revolving fund, US$7,5 million tourism facilities services development and upgrading revolving fund and the smallholder farmers irrigation infrastructure development fund to the tune of US$20 million.
From US$22,5 million for industry retooling and value chain, the funds have been allocated to the following value chains; US$5 million each for the cotton sub-sector, leather and pharmaceutical companies, US$4 million for fertiliser and US$3,5 million for other agro-processing.
Speaking to Business Chronicle, National Blankets business development manager Mr Shepherd Nyambirai said the initiative will improve production across all sectors as the country works towards an upper middle-income economy by 2030.
“The Government’s effort is highly commendable and this will enable the value chains to harness their potential towards economic development,” he said.
“This is positive development, which will catalyse productivity across the value chains. As National Blankets we are in a process to apply for the funding.”
The giant textile company resumed operations early last year after managing to dodge liquidation having come out of judicial management after shareholders paid all the creditors their dues, which ran into millions of dollars.
The company temporarily ceased production late last year after being denied a tax clearance by the tax authority over an estimated $800 000 debt, which was later on settled. At its peak, National Blankets used to be one of the top employers in the city and contributed to exports. Hopes are high that the company’s revival would amplify Bulawayo’s re-industrialisation and absorb more workers.
The revival of the textile industry has been affected by influx of cheap imports and the players keep on calling for the Government to put measures, which will promote the sector’s growth.
Access to cotton lint has also been the problem as producers prefer export market than selling to local players.
In its research on cotton to clothing value chain, Confederation of Zimbabwe Industries (CZI) said price distortions are constraining smooth operations in the cotton-to-clothing value chain where local spinning companies and downstream operations are facing lint shortage despite availability of the raw material at home as ginners prioritise exports. — @SikhulekelaniM1
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