Zimbabwe’s central bank is in talks with banks to reduce interest rates on loans to stimulate production across various sectors of the economy, Vice-President Constantino Chiwenga told a business conference on Wednesday.
“Most companies are now shells with old and antiquated equipment, resulting in inefficient production. It is therefore, important to recapitalise the industries through collaborative efforts between the government and the private sector,” he told the Zimbabwe International Trade Fair International Business Conference.
“The government has taken a number of steps to assist the local manufacturing industry by facilitating a number of finance facility frameworks… .The Reserve Bank of Zimbabwe has also engaged the Bankers Association of Zimbabwe to reduce interest rates on loans for productive purposes,” he said.
Local financial institutions capped interest rates at a high of 12 percent per annum from October 2015 from around 30 percent following another RBZ directive.
Chiwenga, who led the military in toppling long-time ruler Robert Mugabe last November and was rewarded with the vice-presidency under Emmerson Mnangagwa, saids the new administration was keen to revive the manufacturing sector and to make it competitive regionally and internationally.
“The essence is to invest in manufacturing processes that will give us a competitive edge on the global markets in terms of product pricing. Once we become competitive, the growth possibilities of our manufacturing sector can be achieved,” he said.
He said government was also working to harmonise investment laws and regulations to attract foreign investment.
“We are capacitating the one shop stop investment centre in order to reduce the bureaucracy and red tape. Government is also intensifying implementation of ease of doing business reforms another important variable form to our re-industrialisation,” he said.