HomeLocal NewsGovt stalls $40m Byo fund

Govt stalls $40m Byo fund


Government has not yet released its $20 million contribution to the $40 million rescue package for distressed Bulawayo firms, five months after Finance minister Tendai Biti launched the programme, Parliament heard yesterday.

Permanent secretary in the Ministry of Industry and Commerce Abigail Shonhiwa made the disclosure when she appeared before the Parliamentary Portfolio Committee on Industry and Commerce to explain delays in the disbursement of the fund.

“As government, we have not yet put in the $20 million into Dimaf (Distressed and Marginalised Areas Fund) and the other $10 million was supposed to be raised this financial year by the Ministry of Finance and they said they were still mobilising resources,” Shonhiwa said.

Late last year, Cabinet approved the setting-up of Dimaf where government was expected to contribute $20 million while Old Mutual would provide an equal amount for disbursement through CABS.

Old Mutual has already honoured its $20 million pledge.

The establishment of the fund followed recommendations by a Cabinet taskforce under the Let Bulawayo Survive campaign.

At least 80 Bulawayo firms had closed down or relocated to other cities leaving more than
20 000 workers jobless.

“We submitted a list of industries that needed funding to CABS, but they came back to us saying the conditions were stringent — collateral was required, interest rates were too high and also that applicants were required to produce audited accounts for the past two years, which they found onerous and impossible to meet,” Shonhiwa said.

She said 60 companies had applied to benefit from the fund, but processing of the applications had been slow because it was done between December and January when most companies were on their annual break.

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