Expedite RTGS$30m for looted firms’

Source: Expedite RTGS$30m for looted firms’ | The Herald 19 APR, 2019

Expedite RTGS$30m for looted firms’
Minister Ndlovu

Africa Moyo
The Confederation of Zimbabwe Retailers (CZI) wants Government to expedite modalities of disbursing the RTGS$30 million facility designed to bail out distressed firms, including those that were looted dry by opposition hooligans during the January disturbances.

Government set up the RTGS$30 million fund to help businesses reconstruct and restock.

Bulawayo businesses were largely impacted by the demonstrations as looters tore through grocery shops and butcheries, even if they were closed, and looted almost all of the stock.

Some of the affected business are yet to reopen while others are struggling to find their feet amid reports there are some businesses that might rise again.

But despite the fact that the validation process – which involved assessing the damage on properties, identifying what could be salvaged and quantifying amounts needed to revive the affected businesses – was done in February, retailers say nothing substantial has materialised.

Industry and Commerce Minister Nqobizitha Mangaliso Ndlovu, who led the inter-ministerial committee set up to assess the extent of damage, said the RTGS$30 facility would be extended as loans to businesses.

However, almost three months later, CZR president Denford Mutashu, says there has been no headway, with over 100 retailers in Matabeleland saying they have not received a cent from the facility.

Mr Mutashu wants Government to provide an update to businesses on what became of the facility as retailers are badly in need of a financial rescue package.

“I spoke with more than 120 of the (affected) shops in Matabeleland . . . and they are complaining that right now, the pace is slow,” said Mr Mutashu.

“We were happy about the progress that was made in the first 43 days (after the demonstrations) and we are also happy that a lot of them have filled in the loan application forms, but the clarity around the value of the RTGS$30 million facility, as when it was offered, it was worth that much, is required because obviously given the changes that have taken place on the market, it remains a challenge.

“. . . we believe Government should expedite the process so that whatever value it is then, can be preserved. We also had price increases that have also taken place, and that also erodes that particular value and may diminish the noble gesture that was extended by the Government.”

The value for money presented in bond notes has been affected since the 2019 Monetary Policy Statement that introduced a local currency called RTGS dollars.

Further, the MPS – which was presented on February 20 – also introduced an interbank foreign currency market whose bank is market driven.

Before the introduction of the interbank market, the USD trade 1:1 with bond notes, coins and RTGS balances.

But the coming in of the interbank market now means that all the value of RTGS balances is predicated upon the existing forex rated of any given day.

With the interbank rate at 1:3,1676 on Monday, the value of the RTGS$30 million facility has been diminished, hence the call by Mutashu on Government to expedite the disbursement of the funds.

CRZ also wants Government and the corporate sector to help revive businesses affected by the devastating Cyclone Idai.

Cyclone Idai killed about 350 people, destroyed infrastructure and several businesses in Manicaland and Masvingo.

Survivors are now counting their losses.

But Mr Mutashu said as aid continues to pour in for the survivors, it was imperative that the assistance be long-term in nature.

“We also continue to call for support for Cyclone Idai victims, but we call for long-term support because a lot of these people survived on banana plantations and it’s certainly not going to happen overnight to have the banana plantations back.

“So we believe that income generating projects, as an alternative, can actually be fostered and grow their incomes,” said Mr Mutashu.

Government has also set aside RTGS$30 million for the revival of industries that are being affected by sanctions imposed on the country by West.

The funds would be extended by the Industrial Development Corporation of Zimbabwe (IDCZ).

Minister Ndlovu said the sanctions imposed have adversely affected many local companies, resulting in numerous job losses.

Government now wants to revive the companies to ensure its aspiration of providing decent jobs in tandem with Vision 2030 of transforming the country into an Upper Middle Income economy with a per capita income of US$3 500 by 2030 is achieved.

Minister Ndlovu said significant strides have been made in efforts to help bring back to full operations companies that have succumbed to the ruinous illegal sanctions over the last two decades.

“For some, their closure has left a vacuum that we currently fill with imports and this is unsustainable. Jobs have been lost in the process and we need to regain them.

“In this regard, the IDCZ is realigning its mandate to play its DFI role which will see it play a leading role in the programme of resuscitating distressed companies.

“The Government allocated RTGS$30 million to IDCZ specifically for this purpose but mobilisation will be extended to the private sector so that we crowd fund and reach out to more companies in need,” said Minister Ndlovu.

Already, a database has been created of the companies and the IDCZ is working on an implementation plan to this effect.