Government should conduct an audit to ascertain how the $380 million Zimbabwe Iron and Steel Company debt was accrued, lobby group The Zimbabwe Coalition on Debt and Development (ZIMCODD) has said.
Finance and Economic Planning Minister Patrick Chinamasa has since gazetted the Zisco Debt Assumption Bill to facilitate the takeover the debt by the State to pave way for new investment by a Chinese firm R&F Company.
“Before the Government assumes the Zisco Steel debt, it is every progressive Zimbabwean’s hope to see a debt audit being conducted to determine how the debt was accrued,” said ZIMCODD. ZIMCODD noted that instead of Government assuming the company’s debt, Zisco should liquidate its non-core assets to settle its arrears.
Last year, the Government approved the assumption of over $1 billion worth of debts that have been accumulated by some critical State Enterprises including Air Zimbabwe and Zisco, the National Railways of Zimbabwe and the Civil Aviation Authority as part of accelerated efforts to make them attractive to potential suitors. Minister Chinamasa said the assumption of parastatal debts would continue on a case by case basis.
Minister Chinamasa said Zisco was merely existing in name as most of the equipment was obsolete.
“I am informed that only 10 to 20 percent of Zisco is left, the rest is obsolete. We need a new investor to come in with the resources to set up almost a new structure. We have moved out of the old structure and I am hopeful that the company (new investor) should be on stream by end of March,” Minister Chinamasa said.
Zisco stopped production in 2008 at the height of the country’s economic crisis and between $1 and $2 billion would be required to resuscitate the company, according to Industry and Commerce Minister Mike Bimha.
Essar Africa Holdings, a unit of India’s Essar Group, had agreed to invest in Zisco in 2011 but the deal collapsed in 2015. This was after a similar deal with another India company Global Steel Holdings failed to materialise. Zisco, once a major foreign currency earner used to produce about one million tonnes of steel per year.