Farai Mabeza, Senior Staff Writer 
BUSINESS is cranking up its push for another stimulus package to help commerce and industry recover from the residual effects of Covid-19 and economic strife.
Speaking to The Financial Gazette this week, business leaders said the issue of a fresh stimulus package had become more urgent in light of the dire economic challenges experienced over the past few months.
This comes after the Confederation of Zimbabwe Industries (CZI) revealed that it will unveil a US$300 million facility of its own at its annual congress in Harare next week, to support some of the capital requirements of manufacturers — a figure that experts say falls well short of the required funding by producers.
Kurai Matsheza
It also comes after both industry and commerce complained that many businesses were not able to access the International Monetary Fund’s (IMF) nearly US$1 billion Special Drawing Rights (SDRs) that were allocated to Zimbabwe last year.
CZI president Kurai Matsheza described the situation confronting business as “grave”, adding that things had been exacerbated by a deadly combination of foreign currency shortages, high inflation, recurring drought and the effects of the Russia-Ukraine conflict.
“The impact of Covid-19 has been felt by all sectors of the economy to varying degrees of severity. Some of our members lost markets, production capacity and skills.
“Even before Covid-19 struck, the need for re-tooling was already there. Therefore, the need for a stimulus package post Covid-19 is key for the revitalisation of the productive sector.
“Some of the sectors which were to benefit from SDRs were the cotton value chain and leather and pharmaceutical value chains.
“While some effort towards the pharmaceutical sector is noted, more is required. Thus, the impact of SDRs has not been significantly felt in the identified sectors,” Matsheza said. “As industry, we had also said that some of the funds needed to be deployed to support the auction system. For this, our estimate was about US$500 million.
“However, we are aware that government identified other social service sectors as requiring support, such as education, health and food security for the vulnerable,” he added.
On its part, the government had said that it would allocate a total of US$30 million from the SDRs to the identified sectors.
In this regard, a re-tooling revolving fund for new equipment and replacement for value chains was to be created.
“We want to take part of these SDRs and offer guarantees to banks … so that they don’t ask for collateral from you. We will announce which banks these are.
Reserve Bank governor John Mangudya and Finance Minister Mthuli Ncube
“We believe that this is the best model for us to begin to crowd in banks and the rest of the private sector in the financing of economic growth,” Finance minister Mthuli Ncube said in December last year when he announced the package.
The Treasury chief’s 2022 budget also set aside $2,3 billion to provide medium and long-term finance to enable companies across the agricultural, mining and services sectors to implement value addition activities through the Industrial Development Corporation.
“However, this facility is yet to be availed in 2022 despite the glaring need for funding on the ground,” a recent CZI memo said.
All this notwithstanding, business was still hopeful that an SDR-backed stimulus package would be more effective than the previous $18 billion resuscitation facility announced by the government in 2020.
The president of the Hospitality Association of Zimbabwe, Farai Chimba, said a new stimulus package could come in the form of other interventions outside capital injection.
He gave as an example the recent tax exemptions for the travel and tourism sector, which he said had resulted in significant increases in domestic tourism under the Zimbabwe Tourism Authority’s ZimBho campaign.
“The stimulus which had been covered to grow domestic travel through a statutory instrument exempting VAT on domestic tourists expired at the end of July.
“This was part of the success behind the ZimBho promotion … An extension of this will go a long way to improving the 45 percent increase in domestic travel from 2020 going into 2021.
“We have seen a significant rise in occupancy levels across the country driven by meetings, events and tourists.
“City hotels have traded as high as 90 percent on average, while resorts have picked up in the past three months,” Chimba told The Financial Gazette, Zimbabwe’s number one business publication.
“There is focus on re-tooling and enhancing human capital development which were part of the major issues affected during the pandemic.
“The sector has been involved in intensive marketing in source markets to open up opportunities into the destination.
“On the domestic front, favourable pricing has brought increased traffic into properties,” Chimba added.
Tourism Business Council of Zimbabwe (TBCZ) president Wengayi Nhau also said recently that the sector was engaged in discussions with the government on possible interventions to further boost its fortunes.
“At the moment, we understand that the government is seriously constrained financially … Still, we are in conversation with authorities through the TBCZ and other sub-sectors, as well as the ministry of Tourism and the Zimbabwe Tourism Authority to try to find how best we can have more interventions.
“The sector is now fully open as has been witnessed by the number of passenger arrivals into the country.
“Indeed, we have witnessed an exponential growth in arrivals in terms of people coming into the country via the three major ports of entry by air — Harare, Bulawayo and Victoria Falls,” Nhau said.
“This is a clear testimony that tourism is on the recovery path. This has come as a major relief because most of the companies that offer tourism were on the verge of collapse as a result of a lack of business and income.
“Now we can talk of recovery, we can talk of saving and growing jobs in the short, medium and long term … Before the Covid-19 pandemic, tourism was the fastest growing sector in terms of contribution to GDP, as well as contribution to employment,” he added.
In the meantime, he also said, operators were busy marketing various destinations and putting together tour packages in anticipation of better times ahead.
Meanwhile, some analysts also believe that as much as 50 percent of the SDRs allocated to Zimbabwe should have been channelled towards reviving industry and commerce.
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