Oliver Kazunga, Senior Business Reporter
VARIOUS funding mechanisms to aid retooling for local companies are being worked on to enhance competitiveness in light of a rise in foreign direct investment under the new dispensation, the central bank has said.
Reserve Bank of Zimbabwe Deputy Governor, Dr Kupukile Mlambo, said this in Bulawayo on Tuesday during a breakfast meeting organised by the Engineering, Iron and Steel Association of Zimbabwe. Officials from the Botswana Chamber of Mines and representatives from local engineering, iron and steel companies attended the business event.
Dr Mlambo said in recent weeks the apex bank toured companies in Bulawayo at the invitation of ZimTrade and noted that a number of companies faced funding challenges.
“So what we are trying to do as Central Bank is to find ways of creating funds that can assist local industries because when President Emmerson Mnangagwa says ‘Zimbabwe is open for business,’ he means it.
“So foreign companies are going to come (invest in different sectors) but we also want your own companies to be ready to compete with those companies,” said Dr Mlambo.
“We want to create certain funds to equip our industries with resources for retooling and capital expenditure.”
Of late, the Reserve Bank has created a number of initiatives such as the export finance facility, business linkages facility, horticulture fund and the gold development initiative with a view of boosting productivity and capacity for the export sector.
“Of all these funds, the gold development facility is the one that is really moving and we (RBZ) still have to find out why these facilities are not moving. I have an idea but I don’t want to reveal since I’ve been told there are newspapers here,” said Dr Mlambo, adding that if companies have challenges in accessing the facilities from banks that were doing the disbursements, they can approach the RBZ.
Dr Mlambo said the monetary authority has been tasked by the Ministry of Finance and Economic Planning to work towards transforming Zimbabwe into becoming a middle income country by 2030.
This, he said, means that RBZ and Government need to create an economy that is open for business by attracting foreign direct investment (FDI) as has been enunciated by President Mnangagwa. Dr Mlambo said for a long time Zimbabwe has been failing to attract competitive foreign direct investment inflows and yet in the 1980s the country was one of the largest destinations for FDIs.
“Other countries are getting between $2 billion and $4 billion a year in FDI and where we are lucky as a country we get $500 million a year but in most of the times we have been getting $300 million,” said Dr Mlambo.
Zimbabwe anticipates approved investment proposals to reach a record $2.5 billion this year on the back of growing positive
investor sentiment and interest following political changes that occurred in November last year.
The new Government under President Mnangagwa has pledged to guarantee the rights of foreign investors and to re-engage with the international community to attract investment.