More than $30 million has so far been disbursed from the $70 million Zimbabwe Economic and Trade Revival Facility (Zetref) launched last year to recapitalise local companies, it has emerged.
Companies based in Bulawayo and south-west part of the country have drawn $12 million.
Finance minister Tendai Biti on Monday attributed the low uptake of the funds to lack of information adding that companies from Matabeleland region had been slow in applying and accessing the finances.
“I am pleased to advice that industries in Bulawayo and southwestern parts of the country have finally come to the party,” said Biti.
“Some of the companies that have benefited include Radar MacDonald Bricks, General Belting Holdings, Besta Form, Datlats, Dunlop, United Refineries and five pharmaceuticals.”
Eighty seven companies closed shop and over 20 000 workers lost jobs in Bulawayo last year, putting pressure on the government to take action to tame the tide of closures.
Biti said his ministry was attempting to create an equal spread of resources and had been assured by Commercial Bank of Zimbabwe managing director John Mangudya the funds were being distributed fairly.
“The low level of participation of Bulawayo-based companies can be attributed mainly to information asymmetry, hence the move to launch DiMAF (Distressed and Maginalised Areas Fund) in Bulawayo,” he said.
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Delays in the disbursement of the funds prompted industry to regard it as yet another funding damp squib. The government and Africa Export and Import Bank launched Zetref last year for the private sector to return to full production.
The facility had largely remained underutilised after it was launched in August last year.
Africa Export Import Bank contributed $50 million towards the facility while the government committed $20 million from its International Monetary Fund special drawing rights.
Of the total amount, $45 million was earmarked for acquisition of equipment and capital goods while $25 million would be used for working capital in various companies.
On other fund facilitates, Biti said from the $15 million Microfinance Revolving Fund set up by government, BADEA and CBZ, $6 million had been used.
“70% of these funds are earmarked for small-to-medium enterprises and 30% for microfinance. To date $6 million has been disbursed towards textile, metal fabrication, food processing (drinks) and construction (brick moulding),” said the minister.
Lack of capital has been identified as one of the major structural bottlenecks currently affecting the country’s economy and Zetref is one of the efforts to turn around the fortunes of the productive sectors. In his 2012 Budget strategy paper, Biti said reviving the country’s industrial capacity would require at least $4 billion.
He said at least $1 billion was required next year if the nation is to continue on the growth path. Most companies’ production capacity has remained below 50% as a result of a plethora of viability problems.
Zimbabwe’s economy is expected to grow by between 7,8% to 9% next year compared to 9,3% this year. Domestic capacity utilisation is projected to increase to 60% and in the process reduce imports, in particular of basic commodities.
“It has been estimated that resources required to address capacity constraints facing industry amount to at least $4 billion, with the requirement for 2012 placed at about $1 billion,” reads part of the strategy paper.
