The Sunday News
Dumisani Nsingo Senior Business Reporter
THE Government is in the process of remodelling the Distressed and Marginalised Areas Fund (Dimaf) to ensure that the facility effectively recapitalises the country’s ailing firms.Industry and Commerce Minister Mike Bimha said the Government was also exploring various ways and strategies of channelling capital into struggling industries.
He said Dimaf failed to fully attain its objectives largely due to insufficient funding.
“It’s not true that Dimaf didn’t work but the money wasn’t adequate. If you may recall, Government didn’t put the $20 million it had pledged but the private sector managed to do so.
“The fund was a drop in an ocean and when you put such amounts you wouldn’t expect to revive distressed companies. However, those that managed to get somehow improved productivity but the fact still remains that it wasn’t sufficient and it didn’t make an impact,” Minister Bimha said.
He said the Government was in the process of engaging strategic partners to enhance Dimaf coffers as well as ensuring that the companies that benefit from the facility are able to sustain themselves and remain viable on long term basis.
“We are in the process of revisiting the whole issue of Dimaf and are already engaging international financial experts that are going to work together with the concerned companies and Government.
“We are looking at having Dimaf being well funded and making sure that those companies that benefit are assisted to manage the investments by professionals,” Minister Bimha said.
A total of 48 companies, about half of them from Bulawayo have received loans worth $28 million from Dimaf between 2011 and 2014.
“The last time Dimaf had strict conditions for companies to access the loans of which some of them were not suitable for companies that were distressed and we are working on ensuring that the latest facility is a bit conducive,” Minister Bimha said.
He also said efforts to transform the Industrial Development Corporation into a Special Purpose Vehicle to provide medium and long term finance for industries were at an advanced stage.
“IDC is also opening a window to finance and manage funds for distressed companies. We are discussing with both local and international financiers to raise financial seed to enable IDC to carry out its mandate,” he said.
Captains of industry reiterated that the revival of the country’s industries hinges largely on Government’s ability to facilitate policies, which promote Foreign Direct Investments (FDIs).
Confederation of Zimbabwe Industries president Mr Charles Msipa said the country’s entire manufacturing industry was in demise although he was quick to say that Bulawayo had suffered the most as it has lost its status of being the country and sub-Saharan region’s industrial hub.
He said Bulawayo attained the industrial hub status largely due to the presence of engineering companies operating within the city as well as being home to the biggest engineering workshop in the region in the form of the National Railways of Zimbabwe’s workshop.
“Bulawayo had the largest engineering workshop in the region, which was the NRZ. It was and it is still the hub of the rail network connecting to Botswana, Zambia and South Africa.
“The NRZ engineering workshop was supplied by a number of steel and metal foundry engineering companies that operated within Bulawayo. These sourced their raw materials from Ziscosteel (now New Zim Steel), which collapsed leading to the closure of these companies as well,” Mr Msipa said.
He also said the Cold Storage Company also used to play a pivotal role in Bulawayo’s economy and the country as a whole and the fall of its operations also had ripple effects on other industries especially the leather sector.
“Matabeleland region was generally a cattle ranching area and that led to the CSC being headquartered there and during its peak it used to export prime beef to the European market and that made Bulawayo an industrial hub taking into cognisance the presence of a number of leather allied industries that benefited from CSC and the vibrant livestock sector,” Mr Msipa said.
He said the country’s manufacturing sector was in dire straits largely due to prevailing infrastructure bottlenecks.
“There are a number of infrastructure bottlenecks but first of all we need to ensure that there is availability of consistent, efficient and affordable water and power. We also need an efficient rail system in ferrying huge cargo because the road network is a costly way of transporting goods,” Mr Msipa said.
He said the Government should create an environment that enables the country to attract capital inflow in the form of FDIs, with the financial sector ensuring that businesses are able to borrow at affordable rates.
“As a country we have to start listening to what prospective foreign investors need. If you look at what our regional neighbours have done in that regard you will envy them yet we have readily available resources in terms of raw materials and human resources as well as basic infrastructure,” said Mr Msipa.
Association for Business in Zimbabwe chief executive officer Dr Lucky Mlilo said the demise of the country’s industries was largely due to lack of credit lines and obsolete and antiquated machinery.
“The revival of the country’s industries is based on the resuscitation of its enablers. As long as the NRZ, Zesa and Hwange Colliery Company Limited are struggling the recapitalisation of the other industries will be slow,” he said.
