Industries have been accessing the ZW$18 billion (about US$209 million) Covid-19 stimulus package announced by the government last year at “favourable” interest rates, Finance minister Mthuli Ncube indicated yesterday, downplaying reports that the injection never reached most companies.
The bailout was announced to help companies limit the impact of Covid-19 induced hard lockdowns and equalled 9% of the country’s gross domestic product. This percentage was in line with injections released by bigger economies like South Africa, but companies have often said they were still waiting for their chance to access it.
Out of the amount, agriculture was allocated ZW$6,08 billion (about US$70 million), the manufacturing industry was allocated ZW$$3 billion (about US$35 million) for working capital, while ZW$1 billion (about US$11,6 million) was earmarked for the mining sector.
The Treasury chief said winter wheat farmers were among the biggest beneficiaries of the package during the current season.
“The stimulus package was targeted at various areas,” Ncube said in a presentation to an oversubscribed and exciting economic review webinar organised by the Zimbabwe Independent yesterday.
“First of all it was agriculture. We have availed adequate resources to the agricultural sector for productive purposes for both summer and winter programmes in terms of grain as well as winter wheat. That has been supported quite well and if you ask them they are not short of money there,” Ncube said.
“Coming to the manufacturing sector, that again we have supported. You saw the facility that we arranged with the central bank for the SME (small to medium-scale enterprises) sector, ZW$500 million (about US$5,8 million), which is accessed through the banking sector and then also about ZW$3 billion (US$35 million) medium-term facility which the central bank has again facilitated working with the Treasury which can be accessed by the manufacturing sector or industry through the banking sector.”
He said all sectors had been receiving the funding at concessionary rates.
“The stimulus package is alive, but of course, its execution doesn’t mean you get money directly from the Treasury. We actually as Treasury facilitate and make sure that we provide the right guarantees for private sector institutions to then extend that credit,” he said.
But industrialists, including the Zimbabwe National Chamber of Commerce and the Confederation of Zimbabwe Industries, had said they were struggling to access the fund.
Industry said the fact that very few banks were participating in the programme made it difficult for them to access funding.
Only CBZ Bank and a selected few are disbursing the package, according to most captains of industry.
Tourism minister Nqobizitha Mangaliso Ndlovu has said players in the tourism sector had not accessed the package as banks were not willing to lend to the sector, the worst hit by the pandemic.
Ncube said the government had made a commitment that “we want to continue supporting especially the tourism sector because we know that it has been hard hit by Covid”.
“So we will make sure that this sector is well supported. We are not yet ready to cut off that stimulus which also involves the removal of VAT (Value Added Tax) for services for domestic tourists,” he said.
Ncube, however, could not disclose how much has been disbursed so far.
The outbreak of Covid-19 and the subsequent necessary measures taken by various governments across the globe, including Zimbabwe, have had a serious impact on the economy and business.
Global supply chains and movement of goods and services were severely disrupted, resulting in companies either scaling down or shutting down completely.