Golden Sibanda in Victoria Falls
CABINET has approved proposals by the Ministry of Industry and Commerce for the Industrial Development Corporation to become an industrial financing entity.
The move is part of ongoing measures by Government to restructure the firm, a Cabinet minister has said.
Under this role, IDC will extend financial assistances to start ups, critical areas identified by Government such as leather and leather products, steel and steel products, pharmaceuticals, food processing, alternative use of tobacco, fertiliser production and firms supported by measures to ramp up production.
Industry and Commerce Minister Mike Bimha told delegates attending the Confederation of Zimbabwe Industries annual congress here that Cabinet had approved creation of a window in IDC, which caters for the funding needs of local industry.
The minister said discussions were currently underway with the Reserve Bank of Zimbabwe on the structure and modalities in terms of which this will be done. The industry financing role will be similar to dedicated roles by Infrastructure Development Bank of Zimbabwe and Agriculture Development Bank.
“There are programmes that we have had before (DIMAF, ZETREF) to assist companies, but what we want now is an institution dedicated to funding industry.
“As you are aware, we have Agribank, which is an institution dedicated to funding agriculture. We also have an institution dedicated to funding infrastructure (IDBZ) and what has been missing is the institution to fund industry,” he said.
“What we now want is to open a window within IDC that caters for funding industry. We have been talking about transformation and reorganisation of IDC. I presented a paper to Cabinet in that regard, which was approved, so that IDC transforms itself to play the role other similar entities play.
“In any case, it is part of its mandate to assists in industrial development and ensure that it nurtures those upcoming industries, and in so doing, to make sure it provides funding.”
Minister Bimha said while Government has in the past given financial assistance to industry, through the Distressed and Marginalised Areas Fund and Zimbabwe Trade Revival Facility, it now wanted a situation where there is an entity dedicated to monitoring whether the funding is invested for the right purpose.
IDC is a self-financing, national Development Finance Institution (DFI). It was established in 1963 through an Act of Parliament, (Chapter 14:10). It is wholly owned by the Government and accordingly is a State enterprise.
IDC has interests across sectors of the economy including Allied Insurance, Zimbabwe Copper Industries, Almin Metals, Olivine Industries, Sunway City, Motira Holdings, Chemplex Corporation, Willovale Mazda Motor Industries and Sino Zimbabwe.
Minister Bimha said over the years, IDC had become a holding companies presiding of an extensive portfolio of wobbling companies. He said Government would now move away from that focus towards industrial development.
“It is an exciting period for us to assist IDC to go that route. We are working with the Reserve Bank in that regard in terms of how best we can do it; whether we will come up with a bank or different institution,” the minister said.
He said the intention was to provide funding for companies operating in critical areas to continue producing, support small to medium enterprises graduating to being large scale companies and help companies cushioned by measures such as SI 64 of 2016 to retool and acquire new technology.