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Oliver Kazunga, Senior Business Reporter
THE government has hinted on plans to transform the Industrial Development Corporation (IDC) into a development finance institution.

The move is necessitated by the need to resuscitate ailing industries and create employment.

“The turnaround strategy is awaiting consideration by the Cabinet committee on state enterprises and parastatals development,” Finance Minister Patrick Chinamasa, said last week.

“The entity will be transformed into development finance. A proposal to transform IDCZ into a development finance institution is being considered.

“This will be done through the operationalisation of the Industrial Development Fund, as already provided for in the IDCZ Act.”

IDCZ is a government private sector investment vehicle for strategic business units.

Over the years, IDCZ has been affected by funding constraints resulting in its subsidiaries operating below competitive levels.

Minister Chinamasa said the restructuring of the industrial corporation was pertinent given its role in industrial decentralisation, value addition and technological advancement.

“IDCZ has challenges regarding lack of capital, debt overhang and other operational constraints, with the subsidiaries operating below break-even point.

“To achieve the turnaround of IDCZ, the strategy is to restructure through dilution of its legacy shareholding, part divesture in existing portfolios, re-modeling economically uncompetitive business cases whilst developing endowment based investments,” he said.

The transformation, he said, entails engagement with strategic partners for the recapitalisation of IDC and the same model used in the takeover of Olivine Industries by Surface Wilmar Investments may also be applied.

This is motivated by the need to resuscitate Zimbabwe’s ailing industries, create employment opportunities and promote a significant increase in foreign direct investment into the economy.