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Golden Sibanda Harare Bureau
THE government plans to establish a special purpose vehicle to mobilise funding from external institutions to support local industry.
Industry and Commerce Minister Mike Bimha said the SPV was mooted in view of the fact that the Industrial Development Corporation may encounter challenges raising funds since it had been targeted under Western sanctions.

He would not say how much needs to be raised as the funding needs of industry vary while support would also depend on priorities, but industrialists contend industry requires $8 billion.

Minister Bimha said the SPV was one of several options that the government was looking at to mobilize the requisite funding to support the revival of the manufacturing industry.

“IDC may have some issues since it was under sanctions, we are therefore still deciding on the need to set up a special purpose vehicle. This is because you want some institution that is there to support industry; deriving authority from government,” he said.

The strategy is informed by the government’s position as pronounced in the Zimbabwe Agenda for Sustainable Socio-economic Transformation economic policy covering 2014-2018.

Minister Bimha said IDC itself might have to establish the SPV, with approval of and guarantee from the government to circumvent challenges presented by the embargo on the company.

The minister said the SPV would be complemented by other efforts already underway, including Memoranda of Understanding the government was about to sign with financiers.

For its part, the IDC will be reconfigured to focus on development finance of the local industry, Minister Bimha said, to secure funding to support the distressed domestic industry.

In this regard, under Zim-Asset the IDC will be recapitalized and its operations refocused as one of the key investment vehicles to assist ailing manufacturing industries.

Minister Bimha said the government would look at prioritizing funding, for instance targeting export companies, and not look at the industry’s every funding need since some companies and products had been overtaken by technology.  “What we need to do is to identify what needs to be done. Some companies need to retool to modernise equipment and reduce costs of operating, in some cases it’s a combination of both equipment and technology,” the minister said.