HomeBusinessBailout Byo’s productive firms: CZI

Bailout Byo’s productive firms: CZI

The proposals are part of recommendations the industrialists’ body wants for the allocation of the US$40 million Distressed and Marginalised Areas Fund (DIMAF) unveiled by government to resuscitate companies from Bulawayo.

More than 90 companies have closed shop in Bulawayo and over 20 000 workers lost jobs in the past year, a development that has put the coalition government under pressure to save the country’s second-biggest city.

CZI president Joseph Kanyekanye told journalists on Friday the prerequisites are meant to expeditiously disburse the funds.
He said that the fund should target industrial revival of the manufacturing sub-sector in Bulawayo in harmony with public expectations.

“We have noted the urgent need for intervention in order to facilitate the expeditious disbursement of funds to distressed companies in Bulawayo,” said Kanyekanye. “We are saying let the money be disbursed quickly, we want to accelerate the process.”

Last month, CABS said that the requirements for companies to access the funds included, “minimum of two years accounts (management accounts or financial accounts) audited, if possible, acceptable collateral, projections for Capex (capital expenditure) loans covering the tenor of loan (12 months), budgets and cash flows and turnaround strategies, including a business plan”.

Bulawayo was historically known as Zimbabwe’s industrial hub.

All big companies like Zimbabwe Engineering Company, Hubert Davies, Radar Metal Industries, National Blankets, G & D Shoes, Merlin, Tregers Group, Stewarts & Lloyds, Hunyani Holdings and Cold Storage Company have since closed or have downsized.

Kanyekanye said that the industry recommends an interest rate of between 10 and 15% per annum.

He said that for the quick disbursement of the funds, the entire approval process, after the receipt of the application, should be 10 working days.
As part of the criteria, CZI wants beneficiaries that have been operating in the environs of Bulawayo for the past three years, to demonstrate that the company is suffering from shortfalls of operating capital and deficiencies of cash flow resulting in low capacity utilisation, among others.

It said the applying firm should also be able to demonstrate the ability to increase capacity utilisation, employment numbers and domestic and regional share.

Kanyekanye said leaving the whole process to government would lead to inevitable delays as no money under the fund has been disbursed to date.
CZI’s recommendation on the expeditious disbursement of the funds comes at a time government has been slow in releasing funds under the US$70 million Zimbabwe Economic and Trade Revival Facility (Zetref).

CZI said that Zetref disbursements took close to a year and said the ministry of Finance should publish entry criteria within two weeks.

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