Industry captains advocate special fund for Bulawayo revival
GOVERNMENT should avail a special funding package for industries from the fiscus to revive ailing companies in Bulawayo and catalyse economic growth along value chains across the country.
Industry and commerce executives said this in Bulawayo yesterday during a pre-budget dialogue symposium hosted by The Chronicle. While some firms in the city have survived de-industrialisation in the wake of economic challenges in recent years, participants said a deliberate and urgent fiscal policy initiative was required to rescue ailing companies and restore Bulawayo as an industrial hub.
Confederation of Zimbabwe Industries (CZI) Matabeleland president, Mr Joseph Gunda, said the city’s industry has the capacity to bolster production and create more job opportunities if given adequate support.
“Companies in Bulawayo are showing positive signs of turnaround with some expanding and doubling their capacity. The CZI manufacturing sector survey has showed us that capacity utilisation rose from 34, 3 percent in 2015 to 47, 4 percent in 2016,” he said.
“Expectations are high that an improvement will be registered this year up from the 47, 4 percent given the positive growth registered in the various sectors of our industries.”
Among the companies that have shown signs of recovery are Tregers Group, that has increased its export volumes by 167 percent since last year, Blue Ribbon Foods, Datlabs, Arenel Biscuits and Bakers Inn.
In the engineering sector, Mr Gunda cited companies such as General Beltings, Bottom Armature Winding, and Shepco Group, which has taken over BMA Fasteners as being on the mend.
Businessman Mr Delma Lupepe said the problems facing industry in Bulawayo could be addressed quickly if Government pours adequate funding for companies.
“We need to zero down and focus on getting Government to set up a fund to re-equip industries and revive firms. That fund should be able to bail out companies so that they produce and export more,” he said.
Given affordable loans, Mr Lupepe said Bulawayo industries would be able to procure modern machinery that would cut production costs and enhance competitiveness that would ultimately weed out imports.
Some participants suggested that funding should be channelled to key industries that have a downstream effect on the economy such as the Cold Storage Company, the National Railways of Zimbabwe among others.
“We want the Government to prioritise the resuscitation of industries in Bulawayo to revive our economy. We also want to see the suspension of duty on raw materials,” said another participant.
Others concurred adding that the 2018 national budget should address the cost drivers and liquidity challenges that continue to constrain industry operations. Major cost drivers include high taxes, labour, electricity, water and transport costs as well as a multiplicity of statutory levies.
“There are a lot of challenges that industries are facing as they try to revive their businesses. One of the key challenges we have is the shortage of foreign currency to import key raw materials and machinery spares.
“This is the biggest threat in the revival of businesses in Bulawayo and the country at large. We’re actually the highest in the region in terms of electricity charges. Labour and transport are also on the high side,” said Mr Gunda.
Some suggested that the forthcoming fiscal policy statement should address the issue of legacy debts for companies as these pose a threat to operations even when guaranteed of funding.
They also suggested that the budget should help build trust among stakeholders in the economy noting that negative perceptions were affecting stability and growth. Others suggested that Government identifies a cocktail of incentives for companies within a stipulated period so as to promote growth.
There was also emphasis on financing research institutions and capacitating them to work closely with industry for knowledge transfer and recommendations based on concrete field findings.
Bulawayo used to be the jewel of the economy but over the years it has suffered deindustrialisation and loss of jobs.