BY FREEMAN MAKOPA
THE Industrial Development Corporation of Zimbabwe (IDCZ) must be funded to the tune of US$500 million to help it make crucial interventions across sectors under its refreshed mandate to industrialise the economy, an official has said.
It is a big mandate to rebuild industries that lost 4 600 companies between 2011 and 2013 alone and threw over 55 000 workers out of jobs during the period.
While the industrial bloodbath has continued over the years, last year’s Covid-19 explosion aggravated a dire crisis when hard lockdowns rolled out by government closed off markets and hammered spending power.
But even before the scourge ended, more deadly policies were announced last week, with government introducing far reaching reforms with punishments of up to $1 million against transgressors.
Industries this week piled pressure on authorities to backtrack on the policy that punishes companies for refusing to take volatile Zimbabwe dollars and factor in parallel market rates in pricing goods and services.
But analysts warned that should President Emmerson Mnangagwa’s administration stick to its guns, a blazing crisis could be on the way.
This could make the IDCZ’s position even more difficult as companies already require about US$2 billion to return to full throttle production.
In his interview with Standardbusiness, IDCZ spokesperson Derek Sibanda said while government had chipped in with about $2 billion for building its capacity to fund companies, this fell short of about US$500 million required to stem de-industrialisation.
“To date government has allocated the IDCZ $240 million with an undertaking to allocate a further $1,9 billion in the current fiscal year,” Sibanda said.
“However, these funds are hardly adequate to meet industrial requirements for industrialisation.
“We would need upwards of the equivalent of US$500 million to adequately cater for the needs of industry.
“Of course, you and I will be fully aware of the financial constraints facing treasury, which constraints have been worsened by the incidence of the Covid-19 pandemic.
“In an ideal situation government would adequately capitalise the corporation.
“There is also the question of policy support — government’s business is to create an enabling business climate through appropriate and consistent policy support.”
He said after government approved the IDCZ’s restructuring that will see it dispose of mature loss-making investments, dissolve poorly performing investments and develop projects with potential to grow, the corporation had identified investors for Amtec Motors, Surface Wilmar Investments and Olivine Industries.
During the same period, the IDCZ, one of Zimbabwe’s biggest firms disposed of shareholding in medium sized mature investments including Almin Metal Industries and Stone Holdings Limited.
“The IDCZ continues to deliver against the strategic objectives laid out in our strategic plan,” Sibanda said.
“The IDCZ strategy is anchored on four strategic pillars; project development and implementation; industrial project financing; joint venture partnerships and innovation and technology for efficiency, value addition and beneficiation.
“The IDCZ is targeting to finance viable high impact projects that are either export oriented or import substitution operations and value chains as prioritised in the NDS1 (National Development Strategy 1).
“This will in turn create additional employment and increase the exploitation of local raw materials across the country.
“In that way the corporation will make a significant contribution to the gross domestic product.”
In October, the Zimbabwe National Chamber of Commerce (ZNCC) said the IDCZ requires an injection of up to US$100 million to bolster its capacity to bail out companies.
Sentiment towards re-engineering the IDCZ’s operations has been growing, with industry pointing out that it has failed to keep pace with emerging trends.
The ZNCC wants the IDCZ to operate along the lines of IDC SA in order to give impetus to ongoing efforts to revive hundreds of firms that have collapsed.
“The IDCZ should be restructured to make it a development finance institution which supports industry instead of it remaining an investment vehicle as it is now,” the ZNCC said.