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year to help companies in distress was now operational, and local businesses should start applying for the funds.

Speaking in Parliament last week, Minister Biti said companies closing down were responsible for their closure because they had not utilised the loans Government had mobilised.
He was responding to a question by Goromonzi North legislator Mr Paddy Zhanda on Government policy regarding companies closing down due to working capital constraints.

Minister Biti said Government had lined up a number of loan facilities that ailing companies could utilise to resuscitate their operations. But the companies were not using them.
ZETREF was launched by the Government and the Africa Export and Import Bank last year to help stimulate industrial productivity.

“We tried to mobilise lines of credit with ZETREF and I am pleased to advise that the facility we put together with Afrexim Bank, managed by Interfin together with various banks, is now operational.
“What is disappointing me is the slow uptake of these amounts. Less than US$10 million has been disbursed, even though this funding has been operational since September 2010. Less than 7 percent of the funds had so far been disbursed,” he said.

“I urge our business people to put in applications with all banks that are handling these facilities, particularly vulnerable industries, so that they can be processed.”
Delays in the disbursement of the funds prompted industry to regard it as yet another funding damp squib.

Minister Biti added that there was another US$15 million for small-to-medium enterprises.
But he said this facility was facing challenges on what criteria to use in defining an SME.

“The debate right now is – what do you define as an SME? What is your threshold for an SME? Do you look at the number of employees and say an SME is a company that employs four people or do you look at the balance sheet? That is the problem,” Minister Biti said.

He said there was another US$350 million facility provided for by the PTA Bank to be accessed through commercial banks.
Meanwhile, Ziana reports that Confederation of Zimbabwe Industries chief economist Ms Lorraine Chikanya said industrialists were having difficulties in accessing the money from the banks.

She said industry, generally, was not aware that ZETREF was now “operational”.
“The banking sector has not yet started disbursing the money to industry. The delay could be as a result of logistical problems. We are asking when the money is going to be available,” Ms Chikanya said.

She said as various financiers delayed to fulfil pledges they made to the country, industry, choked by Western sanctions, was battling to produce.
Apart from ZETREF, industry is also still awaiting a US$70-million line of credit that Botswana pledged to Zimbabwe two years ago.

“Without money, we will continue to perform below capacity,” said Ms Chikanya.
Under ZETREF, US$45 million was earmarked for re-tooling, and the remainder for working capital.

The prevailing liquidity crunch is frustrating efforts by industries to boost production across all economic sectors.
Minister Biti said he would be announcing measures to mobilise resources from the Insurance sector in the Mid-Term Budget.

“We are going to announce in the Mid-Term Budget an attempt to mobilise resources from the insurance through Section 26 (a) of the Insurance Act,” he said.
He added that the reason some companies were finding it hard to produce at low production costs was because they used old equipment.
“There is the problem of ageing equipment, old equipment that is being used by our industries, old practices. For example, we have a fertilizer industry in Zimbabwe that is run primarily because of Sable

Chemicals in the Midlands.

“It uses old electrolysis technology that consumes massive quantities of electricity. The world has moved on and has abandoned totally the electrolysis method,” he said.
“If you go to most industries, (you will find) they are using boilers in the manufacturing sector. Most industries (elsewhere) have moved away from the boiler system.

“Most manufacturing is now done by technology, by 4G, by 3G. But we are still using old, physical, manual technology that is 23 years behind. I have said before that as far as technology is concerned, this country is 23 years behind. It is another challenge.”