HomeNewsGovt bemoans low uptake of funds

Govt bemoans low uptake of funds

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The government is disappointed by the low uptake of funds meant to resuscitate struggling companies, Industry and Commerce minister Welshman Ncube said yesterday.

Ncube cited the Zimbabwe Economic Trade Revival Fund (Zetref), which has been operational for over two years as an example.

You have nearly 50% not having been taken when it has been there for a long time, he said.

He said in the case of the Distressed Industries Marginalised Areas Fund (Dimaf), out of the seven recipients only two companies that were Bulawayo-based have accessed the funding.

Only two have offices in Bulawayo the others are not Bulawayo companies, he said.

The rules and conditions we create are not suitable for the economy that we have.

Ncube said the rules were too stringent for an economy that was still emerging from depression.
Recently Finance minister Tendai Biti said the delay by financial institutions to pay upfront fees and apply for draw-downs was impacting on the disbursement of Zetref.

Biti said although projects worth $45,2 million were approved by Zetref assessment committee, delays were caused by banks demanding fees upfront and applying draw-downs.

Actual disbursements to date are $17, 8 million. Low disbursements are due to delays by banks in paying upfront fees and applying for draw-drowns, Biti said.

The fund was launched by the government in 2010 as a $100 million facility to try and ease the liquidity challenge in the country and assist firms recapitalise their operations through acquisition of new equipment and injection of working capital.

Biti said the bulk of the funds were allocated to the productive sectors of the economy to boost capacity utilisation.

Meanwhile, Ncube said President Robert Mugabe will on Thursday launch the Industrial Development Policy ( IDP) and National Trade Policy (NTP) in the capital Harare.

The IDP and the NTP will run from 2012 to 2016 and are critical for the revival of industry and commerce.

The vision of IDP is to transform Zimbabwe from a producer of primary goods into a producer of processed value-added goods for both the domestic and export market and its mission is to create a vibrant, self-sustaining and competitive economy through promotion of viable industrial and commercial sectors as well as domestic and international trade, he said.

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