US$69m retooling fund for Matabeleland
SEVENTEEN manufacturing firms in the Matabeleland region are earmarked to benefit from the US$69,5 million retooling loan proposal pitched by the Confederation of Zimbabwe Industries (CZI) for businesses with bankable brownfield projects and in need of mechanisation and expansion.
The US$69,5 million loan forms the first phase of an elaborate plan by the industrial lobby group to buttress the Government’s re-industrialisation agenda, particularly the restoration of Bulawayo as the country’s manufacturing hub.
Bulawayo faced de-industrialisation since the turn of the millennium as several big companies either closed shop or relocated to Harare due to different challenges leaving thousands of people jobless.
The situation was worsened by the imposition of illegal Western sanctions, which cripple trade relations and the supply of critical imports and equipment.
The coming in of the Second Republic under President Mnangagwa in 2018, has revived investment interest through several ease-of-doing-business policies, which have seen several companies being revived while others have increased production with foreign investors also coming on board.
The Government has also been assisting companies to retool hence a significant number of businesses are back in production and creating employment through diversification of operating models.
The Second Republic has committed to assisting Bulawayo to regain its status as the country’s industrial hub through policy support and facilitating financing windows to develop a solid domestic industrial base, which is a critical building block towards the attainment of an upper-middle-income economy vision by 2030.
The city’s industry is already showing signs of positive recovery in response to supportive Government measures. To boost the momentum, CZI has identified 17 firms with bankable brownfield projects for funding.
A brownfield project is a land or property that was earlier used for commercial purposes, but at present does not serve any purpose.
CZI Matabeleland Chapter vice president Mr Clive Oxiden Willows said Bulawayo’s manufacturing industry was looking at a positive retooling loan for the resurrection and mechanisation of the sector.
He said they have since submitted the list of 17 companies to Bulawayo Minister of State for Provincial Affairs and Devolution, Judith Ncube, for onward transmission to the Ministry of Finance, Economic Development, and Investment Promotion for consideration.
“Bulawayo manufacturing industries are looking at a positive retooling loan for the resurrection and mechanisation of this sector, through the dedicated efforts of the Minister of State, Honourable Judith Ncube,” said Mr Oxiden-Willows.
He said Minister Ncube has been instrumental in negotiating a longterm, low-interest loan for the retooling and mechanisation of Bulawayo’s manufacturing sector.
“CZI has put forward 17 companies that have bankable brownfield projects, for the mechanisation and expansion of existing manufacturing industries, to the value of US$69,5 million.
“This is the initial phase of the application, which has been submitted to the Metropolitan Minister for processing by the Ministry of Finance.”
However, the chamber could not immediately release the names of the 17 targeted firms. Rather, Mr Oxiden Willows said there will be a second phase of bankable projects targeting the manufacturing sector and urged firms to submit proposals as soon as possible.
The initiative comes at a time when industrialists have raised concerns over the cost of borrowing and inadequate equipment at firms, which compromise Zimbabwe’s product competitiveness in both the local and export markets. Some of the old equipment has been blamed for consuming more electricity, which tends to affect production.
Experts say industries need longterm loans with low interest rates, which will allow sustainable growth.
At the moment, financial institutions are offering short-term financial support, which is not favourable for industries, especially for retooling, industrialists say.
Riding on the positive policy environment, several firms are showing resilience and have embarked on expansion drives to increase capacity utilization with some focused on revitalising the critical value chains to increase job opportunities and exports.
Key examples include National Foods Holdings Limited’s new mill at their Bulawayo site, which is set to increase wheat milling capacity by 2 000 tonnes per month.
Other companies such as diversified Treger Group of Companies, Archer Clothing and United Refineries Limited, Sheppco BMA Fasteners, Metal Founders, Datlabs, Kango Products, Zambezi Tanners, General Beltings, and Arenel are emerging stronger despite the Covid-19 disruptions and other economic constraints affecting the country.
Bulawayo has vast investment opportunities and is one of the areas that the Government designated for the implementation of the Special Economic Zone (SEZ) initiative to restore the city’s former glory as the country’s industrial hub.
In its 2023 fourth-quarter report, the Zimbabwe Investment and Development Agency (ZIDA) noted that Bulawayo’s Belmont, Donnington, Kelvin, and Westondale designated as SEZs have four licensed investors.
Three of the zones, Arenel (Private) Limited, Shepco BMA Fastening (Private) Limited, and Eagletron International (Private) Limited are operational while Chingases Zimbabwe Private Limited is non-operational.