INDUSTRY and International Trade minister Samuel Mumbengegwi says more than $20 billion will be needed to fund the resuscitation of distressed companies in the next financial year.
Mumbengegwi this week said although consultations were still in progress his ministry would lobby for more resources towards the revival of troubled companies.
This comes in the wake of representations by the ministerial committee on distressed companies to the Industry ministry, according to the Zimbabwe Development Bank (ZDB) credit control manager, Gregory Mupfumira.
Mupfumira, who is in charge of the distressed companies fund said although there was activity on the ground, most of the 16 companies which received money between 2002 and 2003 were still underfunded.
“We will be meeting government through the Ministry of Industry and International Trade soon to appraise the government of the situation on the ground with a view to getting additional funding for the rehabilitation of distressed companies,” said Mupfumira who however, could not disclose how much additional funding was needed.
Companies that benefited were either in liquidation or under judicial management.
The fund was set up to provide fresh capital injection in distressed companies in the mining, manufacturing, agro-processing and tourism industries. Mupfumira said 10 of the 16 companies that benefited from government’s $1 billion lifeline last year were failing to repay.
“Only two have since paid up, four have been repaying well while the remaining companies have been having problems,” Mupfumira said.
The ZDB, which disburses the money on behalf of government, receives and assesses applications for onward transmission to the ministerial committee which comprises officials from Industry and International Trade, Finance and Economic Development, Youth and Gender Development ministries, the Industrial Development Corporation and the Reserve Bank of Zimbabwe for further consideration.
Mupfumira said the ministerial committee would meet soon to deliberate on the findings of members who were tasked to tour all the beneficiary companies with a view to coming up with a position to present to government.
Generally we have discovered that in this inflationary environment most of the projects were underfunded and we hope to close these holes through additional funding,” he said.