THE Confederation of Zimbabwe Industries (CZI) has called for the creation of an industry-specific development bank to cater for the needs of the industrial sector.
BY STEPHEN CHADENGA
Addressing a roundtable discussion in Gweru last week, CZI president, Sifelani Jabangwe said the industrialists were working towards transforming the Industrial Development Corporation of Zimbabwe (IDC) into a sound financial institution that can serve industry.
“At the moment, we do not have an industry bank, but we have got an agricultural bank, we have building societies, but we don’t have banks that understand industry and the cycles that manufacturing industry go through,” he said.
“We are pushing for the conversion of IDC into a sound financial institution for industry.”
Industry has been at the doorsteps of government, imploring it to put aside long term funding to reboot the sector. In the past, government has come up with a number of packages to help industries retool.
In 2013, government came up with the $70 million Zimbabwe Economic and Trade Revival Facility (Zetref) to help companies retool. The African Export Import Bank availed $50m million into the facility with government chipping in with the remainder.
The programme did not achieve its intended objectives due to the short term tenure of the loans.
Another facility, the Distressed and Marginalised Areas Fund (Dimaf) was launched in 2011 to revive companies in Bulawayo and other cities, with a kitty of $40 million.
The government and Old Mutual were supposed to inject $20 million each, but the former struggled to meet its end of the agreement. Since 2011, 48 companies, about half of them from Bulawayo, have received loans worth $28 million from the fund.
In his 2016 budget review and 2017 outlook, Finance minister Patrick Chinamasa said activity in the manufacturing sector was expected to improve on account of strong agricultural performance and related value chains, continued ongoing doing business reforms to reduce cost structures implementation of Statutory Instrument 64 of 2016, the use of plastic money and the ongoing doing business reforms to reduce cost structures.
Chinamasa said positive impact of government interventions in support of domestic value addition contributed towards revival of the manufacturing sector The interventions, Chinamasa said included SI 64, domestic financial system export incentive arrangements by the Reserve Bank, as well as supportive duty rebates on imported capital equipment.
Jabangwe said CZI was pushing for various funding programmes promised by the Reserve Bank of Zimbabwe as well as collaborating with local tertiary institutions for research and development.
He said although the South African rand is included in the currency of basket approved by the government, there was need for industry to push for mechanisms and systems that make it easy to use the currency.
“We need to use the rand more, since most of our trade is with South Africa,” he said.
“It’s not a lobby as such to the government, because the rand is already among other currencies in multi-currency basket, but just to make it easy for the transacting public to use the rand they are earning without necessarily first converting it to the United States dollar,” Jabangwe said.