GOVERNMENT has turned to the private sector for solutions as deindustrisation intensifies on the back of liquidity constraints biting the economy.
Speaking at an economic outlook symposium organised by the Mandel Training Centre and the Gordon Institute of Business Science (GIBS) 2014 economic outlook symposium in Harare yesterday, Industry and Commerce minister Mike Bimha yesterday said there was an urgent need to recapitalise the local manufacturing sector amid concerns that some firms could be facing imminent closure.
He said credit should be extended to companies that have viable business models. Experts say most companies have struggled to replace pre-independence machinery, relegating their competitiveness.
According to the Confederation of Zimbabwe Industries (CZI)’s latest Manufacturing Sector Survey, capacity utilisation declined by 5,3% from 44,9% in 2012 to 39,6% in 2013 due to numerous challenges facing the industry.
“Do we have to resuscitate everyone who is dead? I don’t think so. Probably there are some who have reached the end of the circle, but it’s again not for government to decide.
“I invite the private sector. Let’s prioritise who should be resuscitated and who should be left,” Bimha said.
Bimha said government had engaged local financial institutions for funding to revive the manufacturing industry.
“Previously, we have had very fruitful discussion with our local financial institutions for funding to revive the manufacturing institutions,” Bimha said.
He added that government had also made a decision to reconfigure and re-capacitate the Industrial Development Corporation (IDC) to focus more on industrial development.
“A decision has been made also with IDC. IDC will be reconfigured and capacitated to focus more on industrial development . . . The institution will now facilitate industrial funds,” he said.
He added that government was also in discussions with Common Market for Eastern and Southern Africa (Comesa) with the assistance of the PTA bank to fund for the resuscitation of the Bulawayo industries.