Industry seeks long-term finance

via Industry seeks long-term finance – NewsDay Zimbabwe March 17, 2016

Zimbabwe is seeking long-term financing to resuscitate industry amid revelations that the country was now importing 80% of its goods.


A 2015 Confederation of Zimbabwe Manufacturing survey reported that the manufacturing sector recorded low output and capacity utilisation of 34,4% attributed to the influx of cheap products and absence of affordable funding for retooling.

Speaking at the sixth investment and trade initiative meeting on Monday, Industry and Commerce deputy minister Chiratidzo Mabuwa said financing should be available at affordable interest rates.

“Zimbabwe is also looking for long-term financing at affordable interest rates for on lending to industry.

Investment is, therefore, sought for the resuscitation of existing industries as well as new ones.

The sector has been weakened to the extent that the country is importing 80% of its goods thereby, exerting pressure on the scarce foreign currency, as well as worsening the liquidity crunch,” she said.

“The manufacturing sector has been affected by the lack of long-term finance, as well as obsolete technology. The economic downturn the country experienced led to a number of companies facing serious challenges.”

Mabuwa said government was in the process of attracting regional and international banks that are keen to facilitate trade and investment in a bid to recapitalise the manufacturing sector.

The ailing manufacturing sector continues to remain constrained amid lack of long-term capital investment for local companies and foreign direct investment (FDI).

According to the Reserve Bank of Zimbabwe, economic review for the week ending February 26, commercial banks’ weighted lending rates for individual and corporates are 11,48% and 7,29%, respectively.

The absence of long term financing also comes on the back of previous attempts by government to recapitalise the manufacturing sector. Such attempts include the Distressed and Marginalised Areas Fund (Dimaf), a government fund for local companies that required cheap long-term capital for retooling, which has struggled to secure funds to help recapitalise companies.

Zimbabwe Chamber of Commerce president, Davison Norupiri said government intervention in the manufacturing sector through Dimaf was hampered by liquidity challenges.

“The advances to the manufacturing sector are still low such that it requires offshore funding. Government intervened through (Dimaf) but given the liquidity challenges, the facility could only do so much. Zimbabwe’s manufacturing sector is one of the most diversified in the continent,” he said.