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]