MOST companies in Bulawayo earmarked to benefit from the Distressed Industries and Marginalised Areas Funds (Dimaf) were under judicial management, thereby delaying the disbursement of the funds, Finance minister Tendai Biti has said.
Report by Nqobile Bhebhe
Speaking at a 2013 Budget consultative meeting in Bulawayo, Biti said he would soon engage Industry and Commerce minister Welshman Ncube over the matter in an effort to find a solution.
“There have been delays in disbursing the funds and it’s due to the fact that some companies are under judicial management and they applied. So the challenge; is do we give those companies that are almost dead the funds or not? We have to discuss this with minister Ncube,” Biti said.
“As you are aware the government injected $20 million and CABS also chipped in with another $20 million to make it$40 million. But whether Dimaf is for Bulawayo or the whole of Zimbabwe, it (the amount) is a drop in the ocean. Industry alone needs about $5 billion and mining $7 billion to recover.”
Biti said applications worth $20 million were still being processed, but could not divulge names of beneficiaries due to client confidentiality.
Dimaf, a facility meant to help struggling firms to purchase equipment and raw materials to enhance output and quality of goods, as well as assist them cover their operating costs, was launched in October last year.
However, there have been concerns lately over delays in disbursing the funds, especially against the backdrop of increased firms that were on the brink of collapse. This week, Belmor Manufacturers closed shop in Bulawayo and offloaded some 300 workers, amid disclosures that it had also applied for Dimaf bail-out.
Last year, at least 85 firms in Bulawayo closed shop due to viability problems. Capacity utilisation in the manufacturing sector has stagnated at 57,2% owing to liquidity constraints as most firms failed to access long-term lines of credit to retool and recapitalise.
Recently, the Zimbabwe Congress of Trade Unions Bulawayo Western Region disclosed that close to 10 companies in the city were placed under judicial management in the last eight months, as the industrial meltdown continued in the country’s second largest city.