Zisco revival definite

Oliver Kazunga Chronicle Reporter
WORK on revival of Zisco, now NewZim Steel, will “definitely” start before the end of the year, Industry and Commerce Minister Mike Bimha said yesterday.
Officially opening the Confederation of Zimbabwe Industries (CZI) annual congress in Bulawayo, he assured industry that the long awaited deal would be implemented.

“As part of the implementation of the new policy blueprint on low hanging fruits, let me also assure you that work on the revival of Zisco or NewZim Steel will definitely commence before the end of the year,” said Minister Bimha.

CZI immediate past president Mr Kumbirai Katsande said the revival of Zisco was long overdue. He said the once mighty company was in a sorry state.

“I drove through Zisco this morning, the delays that have taken place to revive it have created a sorry state; it’s an embarrassing situation that people are still not employed,” he said.

In 2011, Zimbabwe signed a $750 million deal with Essar Global to revive operations at the country’s largest steel manufacturing firm.
However, the deal is yet to be implemented as there were disagreements between ministers in the inclusive Government whose term ended on 31 July.

The CZI annual congress, which ends tomorrow,  is being held under the theme, “Imperatives for Reversing De-Industrialisation.”
Minister Bimha bemoaned the continued critical state of local industry saying it was high time solutions were sought to revive the manufacturing sector.

According to the CZI manufacturing survey report released last week, capacity utilisation has dropped from 44.2 percent to 36,9 percent owing to a host of challenges among them the liquidity crunch, antiquated equipment, and power cuts.

“The challenges that have caused our industry to lie bed ridden in a comatose state, though well known and thoroughly documented, are still regrettably waiting for delivery of the prescriptions.”

Minister Bimha said solutions to address de-industrialisation were long overdue adding that the major hindrance was access to development finance.

He said multilateral institutions such as the World Bank through its subsidiaries – the International Finance Corporation and the International Bank for Reconstruction and Development (IBRD) had in the last decade shut their door on funding projects in Zimbabwe.

“The only meaningful development assistance that is affordable at London Interbank Offered Rate (LIBOR) aligned interest rates of not more than two percent has been accessed from China. I do not have the exact figures of resources availed save to say the envelope is less than $1 billion against an industry requirement of over $10 billion,” said.

In addition, Minister Bimha said, all funding through the European Development Fund (EDF) was effectively halted in 2002 through sanctions.

“We have been informed, though without official confirmation, that funding will be resumed in 2014 under EDF 11 lenders of such resources,” he said.

He said on the regional and local front there has been some limited success with over $100 million availed to cater for the Zimbabwe Economic and Trade Revival Facility (ZETREF) and $40 million earmarked for the Distressed Industries and Marginalised Areas Fund.
“Although there have been over 60 percent of projects approved for both facilities, less than 25 percent of uptake or disbursement has been achieved. This has been due in the main to both the short-term nature of the tenure of the loans, high interest rates as well as Government’s lack of fiscal space to honour its pro-rata obligations.”

He said the imperatives to address the challenges facing industries required a clarion and collective call for the removal of economic sanctions.

Another imperative to re-ignite industries was tied to budgetary outlays in the form of financial incentives, policy space and flexibility through rationalisation of the tariff, as a development tool and revenue generating instrument.

He said international engagements were crucial to attract foreign direct investment.
In her welcoming remarks, the Bulawayo Minister of State for Provincial Affairs Cde Nomthandazo Eunice Moyo said the city which was once the industrial hub of the country continued to suffer de-industrialisation.

“Bulawayo is facing serious industrial decline, a situation that has seen workers resorting to vending. The situation has also left families failing to take responsibilities of their families.

“The nation’s responsibility cannot be avoided therefore it is very befitting to have the CZI congress held in Bulawayo in line with the Government’s desire to revive industry.

“This event brings so much expectation to the people of Bulawayo,” she said.
She said more than 100 companies had shut down while a number of other factories were facing litigation.
“The struggling companies need support so that productivity is restored and improve the lives of people in Bulawayo.

“The migration of companies from Bulawayo to other parts of the country was among others due to water challenges. I believe with a unity of purpose, industries will be revived,” she said.