Dumisani Nsingo, Senior Business Reporter
THE Government has set aside funding for the recapitalisation of companies whose products were placed on import restrictions under the Statutory Instrument (SI) 64 of 2016.
Industry and Commerce Minister Dr Mike Bimha said there were a number of initiatives and schemes being undertaken by the Government, private sector and financial institutions aimed at reviving the country’s industries.
“There are initiatives which are being undertaken by the business associations themselves. They are also coming up with facilities aimed at assisting struggling companies. We are also getting assistance from UNIDO (United Nations Industrial Development Organisation), African Development Bank, TDB (Trade and Development Bank). These facilities are so many and the incentives are there to assist those companies that have potential, more so those companies that have potential to export,” he said.
He said the introduction of SI 64 of 2016 has played a significant part in reviving production at most of the companies.
“Our office is unabated by reports from companies in terms of employment that has gone up and the market share and orders that have also gone up. So the measure has been very positive, there is no doubt about it. Only on Wednesday (last week) at a Zimbabwe National Chamber of Commerce (ZNCC) luncheon we were listening to testimonies from companies that had benefited from SI 64 of 2016,” said Dr Bimha.
The gazetting of SI 64 of 2016 in June 2016 saw the removal of 43 products from the Open General Import Licence.
Goods removed from the OGIL require an import licence when being imported into the country. The measure does not ban importation, but limits the quantity of imports coming into the country with import licences only being issued to cover the gap where local production is not adequate to cover demand.
Dr Bimha said there was a need to build on the success of SI 64 of 2016 by further capacitating the companies that benefited from it to ensure a lasting solution towards enhanced productivity.
“We said it right from the onset that SI 64 is not the panacea for our recovery, it’s a temporary measure to assist our local producers, to give them time to retool and re-equip. We will not have that forever but by the same token we say it doesn’t help to say SI 64 is a measure, go and retool and re-equip. They (companies) will come back and say how do we retool?
“The issue is that we have funding. We have funding for those companies that have benefited from SI 64 and these companies if they require funding to retool and re-equip the funding is there and we have called upon those companies to do so. Some of the companies have gone their own way, they have sourced their own funding but those companies that require funding and don’t have can come forward and we assist,” he said.
Dr Bimha said the ministry has also set a monitoring and evaluation committee to assess industry’s efficiencies.
“What we have also done is to set up an Evaluation and Monitoring Committee. We need to follow up on those companies that have benefited from SI 64 of 2016. To assess the impact whether the impact is negative or positive, we want that information and that exercise is ongoing but as I have said in a number of forums, we are looking into something more permanent, something “neater” than going through such an approach of a Statutory Instrument.
“That’s what we are looking at, coming up with a local content policy because with the issue of the Statutory Instrument you then have to encroach into some of the agreements we have with our neighbouring countries. So the Statutory Instrument root is really a temporary one but if we achieve that, what we want is to build upon it,” he said.
The Confederation of Zimbabwe Industries (CZI)’s Manufacturing Sector Survey for 2016 indicated an increase in capacity utilisation from 34,3 percent in 2015 to 47,4 percent in 2016. CZI president Mr Busisa Moyo said retooling of companies benefiting under Statutory Instruments was of paramount importance as it enables them to be more viable.
“This (retooling funding) is still a matter for discussion but it’s important that companies under SI 6 and 126 of 2014 SI 18,19,20 and 64 of 2016 are supported for industrial expansion with adequate funding of six to eight percent for five to eight years for retooling and technology access,” said Mr Moyo.
ZNCC president Mr Davison Norupiri said the unveiling of funds for retooling of companies that benefited under SI 64 of 2016 would go a long way towards improving capacity utilisation as well as enhancing export earnings.
“As captains of industries we welcome that (retooling fund) development. We feel it has to be done urgently simply because those companies that benefited under SI 64 of 2016 have improved their rate of employment and if capacitated they are going to further improve on capacity utilisation and it means they will have a possibility of competing with other players in the region because their products will be landing at a much cheaper price than what we are witnessing presently. It will also mean an increase in exports and this will go a long way in bringing fresh foreign currency into the country,” he said.
Mr Norupiri applauded the Government for implementing a number of policies aimed at improving the viability of the country’s industry.
“We are also happy with the number of policies which Government is coming up with and business has proved that with conducive policies it can achieve its targets. There is now trust between the two parties and that means once a policy is promulgated there will be that spirit of working towards one goal,” he said.