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More Bulawayo firms facing shut down: Prof Ncube

Industry and commerce Minister Prof Welshman Ncube says more companies in Bulawayo are facing closure within the next 6 months due to unavailability of working capital.

Speaking at a Bulawayo Progressive Residents Association conference in the city, Ncube said a recent research by Confederation of Zimbabwe Industries (CZI) revealed that most textile industries in Bulawayo are facing shutdown.

He said the situation has also been worsened by failure by government to implement its $50 million Distressed Industries and Marginalised Areas Fund (DIMAF) initiative.

“You will realise that in April this year the Minister of Finance deposited $10million that was supposed to help Bulawayo Industry but none of it has been disbursed to anyone,” said Ncube.

“I can assure that as a ministry and as a task force on Bulawayo, every week we try and ensure that this money goes to Bulawayo.

“I will tell you that we met two days ago as a task force, and decided that that $10 million which has not been disbursed it will be disbursed subject to a cap of $200 000 as working capital. Some 49 companies will benefit if we implement this decision,” he said.

The minister also said at the moment his ministry is making efforts to prevent relocation of Hunyani Packaging from Bulawayo to the capital Harare which if not prevented is threatening to leave around 100 people jobless.

Amongst other factors that Ncube stated as being responsible for the continuous closure of industries both in Bulawayo and the nation at large are the following:

  • Buying power of citizens very low thus companies are forced either to relocate or close down totally and this contributes 13% to the industrial decline
  • Locally produced goods are facing unfair competition from foreign goods. This is because most of them are priced at $1 for 2 thus buyers shun locally produced to go for the cheaper foreign goods. This contributes 10% decline.
  • Industrial infrastructure has been worn out as most industries are still using old fashioned machinery that break down more often. That he notes it contributes 11% to the decline.
  • Inconsistence in government policy eradicates investor confidence thus less people are willing to invest money in Zimbabwe.
  • Shortage of raw materials leads to shortage of locally finished goods thus supermarkets buy them from abroad and this has resulted in a $4 billion trade deficit whereby the country exports goods worth only $2 billion yet importing goods worth $6 billion.

    Professor Welshman Ncube speaking to residents

    [podcast]http://www.radiodialogue.com/wp-content/uploads/2012/11/Welshman-on-Industries.mp3[/podcast]

     

     

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4 comments

  1. Its a sad situation indeed, but I think if this DIMAF had been availed as early as it was approved then we could have avoided closure of a number of these firms.

  2. Tobias Vodloza Sibanda

    It appears the Ministry of Industry and Commerce has not done much to rescue the struggling firms in Bulawayo and as such, personally ngicinga the ministry is to blame. Approximately 20 companies have either shut down or relocated to esigodlweni sakwaMgo, why did the Ministry not attempt to rescue these companies the way they are trying for Hunyani? The task force has been meeting every week since April to ensure that the US$10 million deposited by biti is disbursed? And yet NOT EVEN A SINGLE DOLLAR OUT OF THE $10 million has been disbursed, kahle kahle kwenziwani kuleyo mhlangano bandla? As for the factors mentioned as being responsible for the closure/relocation of companies, are these factors strictly unique to Bulawayo, why are companies not relocating also from other cities to halale? Aayi I honestly don't understand, onolwazi akasize bo, mhlawumbe Economics ziyangiphica! Kumina the failure to disburse the funds is politically motivated and aimed at further crippling a marginalised Matebeleland!

  3. These people should come out clean on this DIMAF fund. If it's not for Bulawayo alone they should let us know the truth.

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