‘Lines of credit to be distributed equitably’

0
510

The government is working on a model to ensure that lines of credit made available to the country by international funders are equally distributed to all the provinces and not confined to industries operating in Harare, a Cabinet minister has said.

Industry and Commerce minister, Welshman Ncube told NewsDay on Friday in Gweru that the government would insist on an equitable distribution framework for all funds advanced to the country.

“The understanding we have as government is that for the lines of credit, regardless of which country they are from, we have insisted that the distribution must be far between urban and rural businesses,” said Ncube.

“We have agreed with the Ministry of Finance that some of the money would be set aside for rural businesses and also agreed that there should be equitable distribution among all provinces.” Ncube said the government would guard against a situation where money is only confined to Harare.

Business operators outside major cities have been crying foul that lines of credit do not trickle down to them. This they said led to disparities in levels of production which result in them scaling production or shutting down and relocating to Harare.

In March, Zimbabwe and Botswana finally signed the P500 million Bilateral Investment Promotion and Protection Agreement (Bippa) which is expected to unlock more trade and investment platforms between the two countries. These funds are for both equity and working capital.

Bippas guarantee the safety of foreign investments against expropriation and nationalisation.

It also provides procedures for compensation when such acts occur.

Botswana decided to extend the P500 million to Zimbabwe under the Short-Term Emergency Recovery Programme (STERP) that Sadc member states agreed on as a means of assisting Zimbabwe to recover more than two years ago.

However, the process got caught in glitches as it required Cabinet and Parliament approval from both countries. On the current capacity utilisation levels Ncube said the beverage sector is the top performer.

“The last survey we did indicated that the average capacity utilisation is at 45% and it varies from one sector to the other.

“The maximum capacity utilisation is in the beverage industry where it is upward of 95%.
“Some of the lowest levels of capacity utilisation are in the clothing sector which is a mixed sector.”

Capacity utilisation has grown from an average of 10% in 2008.