EMPLOYERS’ Confederation of Zimbabwe (Emcoz) director John Mufukare has called on the government to divert money set aside under the Distressed Industries Marginalised Areas Fund (Dimaf) to benefit small to medium scale enterprises (SMEs) where it could make a difference and create jobs as it is too little to support the revival of big firms especially in Bulawayo.
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Bulawayo has since 2008 been hit by company closures with over 90 firms reported to have shut down as of December last year several others are under judicial management while some are experiencing working capital problems.
The government last year launched a $40 million Dimaf facility to bail out distressed firms with half of the money coming from the Old Mutual.
The fund is being disbursed by the CABS, which says it has so far disbursed over $11 million.
In an interview, Mufukare said a lot of money was needed to recapitalise some of the ailing companies as they had obsolete equipment and machinery which needed to be replaced and, therefore, it would be wise to divert the little money in Dimaf to SMEs which have less capital requirements.
“It’s not possible for the government to recapitalise the industries in their current state,” he said.
“For example, if the government is offering five companies in Bulawayo about $5 million, that money is not enough even if it’s given to one company.”
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Mufukare said some of the companies needed more than $20 million each if they were to be productive and compete internationally and giving such a company less than $5 million would be a waste of time.
“But if that money is given to SMEs, they will definitely use it for the betterment of our economy. The government must only focus on giving capital to SMEs. It must leave these big companies to investors.
“Why in the first place should the State involve itself in the private sector? The government has no money. How and where do we think it can get the money to recapitalise the industries?”
He said Emcoz was engaging the government over indigenisation laws to convince it to realise that some of the laws affect business and country’s economy.
“Here we are creating a lot of undesirable circumstances and indigenisation is one of them. Some of our policies scare away potential investors.”
