Farai Mabeza, Senior Staff Writer 
THE Zimbabwe National Chamber of Commerce (ZNCC) says the government should provide more details on the qualifying criteria for the recently announced US$30 million revolving funds set aside for the industry and tourism sectors.
The US$30 million, split into US$22,5 million for industry and $7,5 million for tourism, will be drawn from the US$958 million Special Drawing Rights that Zimbabwe was allocated by the International Monetary Fund last year to fund economic recovery programmes following disruptions caused by Covid-19 in the past two years.
“Our members cut across all sectors of the economy and across all parts of the country. As the Chamber, we really welcome any kind of support from our government, and the US$30 million revolving fund for industry and tourism will go a long way in assisting companies in enhancing productive capacity and retooling,” ZNCC economist Jephias Makiwa told The Financial Gazette this week.
Finance Perm Sec George Guvamatanga and Minister Mthuli Ncube
“However, at the moment, the limiting factor is the interest rates. It’s unviable to borrow at 200 percent. When it comes to accessing the fund, some members have already started the process to access the funds.
“We, however, ask the government to provide more information on the revolving fund, especially on the qualifying criteria and the rollout plan,” Makiwa added.
He stressed that the size of the fund was dwarfed by the needs of industry.
“The amount is surely not enough. There is this one company that is into fertiliser manufacturing which is currently operating at 25 percent capacity utilisation and requiring about US$25 million to be able to retool and increase capacity to above 85 percent.
“We are talking of only US$30 million for the entire industry including MSMEs. The local industry needs a total overhaul in that some of these manufacturing companies are using obsolete technology that is inefficient in terms of energy consumption and production rates,” Makiwa said.
“However, given our country’s specific circumstances, we can only commend the government for availing support to industry given the limited resources.”
This comes as business has said it wants the upcoming 2023 national budget to provide tax relief and support to both commerce and industry, which are still wrestling with the effects of the Covid-19 pandemic and imported inflation.
The business lobby group says it has already made its “concrete submissions” to Finance minister Mthuli Ncube in this regard.
It also comes as the chamber says business confidence is currently low and investment has been subdued due to high levels of uncertainty and disturbances in global supply chains.
“The inflationary environment has compelled financial institutions to offer short-term credit while the productive sectors are in dire need of cheap but patient capital.
“The high-interest rates, between 80 percent and 240 percent, which are meant to combat inflation and curtail speculative borrowing, have starved liquidity to the productive sectors of the economy, resulting in firms finding it difficult to borrow for working capital requirements and new projects financing,” Makiwa said.
“In this light, the projected growth rate of 4,6 percent is more likely to be missed due to suppressed aggregate demand in the economy following a spell of a liquidity crunch. With the further tightening of the global financial conditions, sales for non-essential commodities will further decline except for basic commodities. The energy crisis has affected the viability of businesses as energy is a key enabler for business operations.”
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