The Sunday News
Dumisani Nsingo, Senior Business Reporter
THE Government has identified 58 companies for recapitalisation under a South African funding facility which is targeting the private sector, a Cabinet Minister said.
South Africa has promised to avail funds to recapitalise Zimbabwe’s private sector although figures are still under wraps.
South African President Cyril Ramaphosa visited Zimbabwe in February where the two countries discussed a number of bilateral economic agreements, among them the need to avail funding for local companies that have been facing funding challenges due to sanctions.
Finance Minister Professor Mthuli Ncube made a follow up visit to South Africa where he also indicated that he was seeking funding targeting to ensure that local companies can access equipment from South African companies.
In an interview, Industry and Commerce Minister Nqobizitha Mangaliso Ndlovu said negotiations with South Africa’s banks, which would see the release of a funding facility to the country’s private sector, are expected to be concluded soon after being temporarily suspended due to the elections in the neighbouring country. South Africans voted on Wednesday last week.
Minister Ndlovu said his ministry has listed 58 companies with the assistance of ZimTrade that are expected to meet terms and conditions required by the financiers.
“We only identified companies that purchase raw materials from South Africa but mainly those that export to South Africa as these are deemed less risky. However, each company will have to access the facility upon satisfying the lenders. For us (Government) mainly it’s to unlock the facility and where appropriate, we provide guarantees. The number of (shortlisted) companies is 58,” said Minister Ndlovu.
He, however, said he could not name the companies at the moment.
The funding facility was deliberated on during a Bi-National Commissions (BNCs) between the two countries early this year.
The two nations who agreed to expand trade and investment, co-operate on helping Zimbabwe re-engage with international creditors, reiterated their calls for foreign sanctions on Zimbabwe to be removed.
Zimbabwe industrial sector needs over $1,7 billion annually to retool plant and equipment to stimulate production in the manufacturing sector.
As a result of the existing funding gap for industrial infrastructure retooling, Zimbabwe’s exports across all value chains are subdued because capacity utilisation in the manufacturing sector was uncompetitive.
Without long-term financing, the private sector has grappled with numerous challenges that include lack of working capital, liquidity constraints, inadequate foreign currency for manufacturing companies to import much needed raw materials.