GOVERNMENT will this year disburse US$5 million under the Distressed Industries and Marginalised Fund (Dimaf) as part of efforts to recapitalise ailing companies in Bulawayo, Ministry of Industry and Commerce acting permanent secretary Staneslous Mangoma said.
Report by Gamma Mudarikiri
Mangoma told businessdigest this week that following the assessment of the state of industry by the ministerial task force late last year, government will soon be disbursing US$5 million to rejuvenate the ailing industry in Bulawayo although other areas like Masvingo are likely to benefit.
“We have received communication from the Ministry of Finance that US$5 million will soon be availed targeted mostly at industries in Bulawayo although at the moment I am not in a position to give the exact timelines of the disbursement,” said Mangoma.
Industry in Bulawayo however requires US$73 million to fully recapitalise. A report released by the Ministry of Industry and Commerce early this year showed that 60 companies in the city, once the industrial hub of Zimbabwe, are on the verge of collapse.
This could add to the 85 companies which closed in Bulawayo last year, predominantly from the clothing and textile sector representing 74%, motor and construction sectors constituting 22% and 4% respectively.
Mangoma said the budgetary constraints continue to thwart government efforts to fund the full recapitalisation of industry in general.
Since the launch of the US$40 million, Dimaf has managed to disburse only US$13 million to revive industry countrywide.
Last year, Treasury availed only US$5 million from the allocated US$10 million. The funds benefitted 30 companies from the initial target of 45 companies.
Bulawayo continues to be de-industrialised as some companies are closing and with others downsizing operations.
Dairibord Holdings this year announced plans that it would be closing its factories in Bulawayo due to low raw milk supply.