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Byo fund ‘a drop in the ocean’

CZI and the Zimbabwe National Chamber of Commerce (ZNCC) said over US$1 billion is needed for the revival of the Belmont industrial area which now looks like a ghost town.

 

A report by a cabinet taskforce, which was set-up to revive Bulawayo industries, indicated that 87 companies shut down due to viability challenges, rendering 20 000 people jobless. The taskforce led by Industry and Commerce minister Welshman Ncube (pictured) noted that 17 firms required US$50 million to revive operations.

CZI Matabeleland chapter president Dr Ruth Labode said the US$40 million could not sustain the firms scrambling to get a share of the cake.

She was, however, quick to point that although the fund was not adequate, it would throw a lifeline to battling companies that have closed shop or those that had scaled down operation.

“The US$40 million does not meet the financial needs of companies in Bulawayo. It’s a far cry. But it’s better than nothing. It’s a positive drive towards resuscitating companies,” she said.

The inclusive government has announced that out of the 87 closed companies, 58 will benefit from the US$40 million, leaving 29 firms closed and thousands of workers jobless. Observers said after the disbursement of the US$40 million, the 29 companies will continue struggling because the coalition government has been pleading bankruptcy.

But out of the 58 shortlisted firms, only 28 have applied for the fund, amid growing complaints that the conditions for qualifying to access the money at CABS were prohibitive for the distressed firms. The Finance ministry said the 28 companies would share US$15 million, meaning the other 30 firms will share US$25 million.

But various organisations have forwarded proposals demanding a quota of the US$40 million. The National Indigenisation and Economic Empowerment Board (NIEEB) is clamouring for a 25% stake of the US$40 million to be set aside for small to medium scale enterprises.

The Matabeleland Business Council, Association for Business in Zimbabwe (ABUZ) and ZNCC have raised concerns over the application process and the conditions being set by government for local firms to qualify for DIMAF.

Companies are complaining that they are required to produce audited financial results for the past three years and high collateral, which at times surpasses the amount of money needed for recapitalisation.

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