Oliver Kazunga, Senior Business Reporter
THE country needs to embark on a retooling programme if industries are to resume or increase production, Confederation of Zimbabwe Industries (CZI) president, Mr Busisa Moyo said yesterday.
Speaking during the Original Equipment Manufacturers breakfast meeting organised by CZI and the Zimbabwe International Trade Fair Company in Bulawayo, Mr Moyo said most of the companies’ equipment was antiquated as many of the machines were more than 20 years old.
“It is difficult to raise capacity utilisation if your equipment is old. This brings us back to the subject of financing, I don’t know colleagues from industry, an interest rate of 10-12 percent per year with one year tenor, does that work for retooling agenda?
“Can we say we are being serious about retooling? Can we say Bulawayo is going to be retooled at 10 percent with a one year tenor; are we serious here. We need a serious programme on retooling,” said Mr Moyo.
Lending rates on business loans by some banking institutions were pegged at between 12 percent and 18 percent and the Reserve Bank of Zimbabwe Governor Dr John Mangudya is on record saying the monetary authority is using moral suasion to ensure banks lower interest rates.
In light of the short-term financing by the local financiers, Mr Moyo said, the National Social Security Authority (NSSA) as a long-term investment fund, should start advancing funding to industry for retooling.
“Where is NSSA, by nature NSSA is a long-term investment fund and they are sitting on lots of funds which are longer dated. Why can’t NSSA deposit with the banks for on-lending for a longer term so that NSSA attends to the needs of industry.
“We have a big industry and NSSA is sitting on $1,3 trillion . . . and can NSSA not commit just $250 000 for industry retooling out of the $1,3 trillion it is sitting on?”
According to the CZI manufacturing sector survey report released last year, 50 percent of the few remaining companies in Bulawayo , once the country’s industrial hub, have equipment that is more than 20 years old.
In the report, the CZI president said 70 percent of the companies in the Midlands province also have equipment that is very old.
Mr Moyo said faced with such a scenario it would be difficult for companies to raise their capacity utilisation.
Responding to industry’s concerns, Industry and Commerce Minister Dr Mike Bimha said:
“RBZ has come forward to support those companies that really need retooling. The Central bank has been very clear about those companies that want to export. There are facilities that are there.”
On the NSSA issue, Dr Bimha said the private sector should come forward to Government and state its proposal.
“The private sector should come forward to say this is what we think NSSA can do for us . . . the onus is upon you (industry) to say this is what we think NSSA can do for us,” he said.