15 February 2013

Zimbabwe: More Byo Companies On Verge of Collapse

SIXTY companies in Bulawayo are on the verge of collapse and urgently require US$73 million capital, according to a report by the Ministry of Industry and Commerce.

The number is adding to 85 companies which closed in 2012 as the city continues to de-industrialise.

"The Ministerial Task Force on the revival of industry has revealed that 60 companies are under severe distress and required financial assistance in the form of working capital and capital expenditure amounting to US$73 million," reads part of the report.

From the companies which closed, 22% were from the clothing and textile sector, 74% from the motor industry and 4% from the construction sector.

Government continues to struggle to avail funds to revive industry in Bulawayo. According to the report, government last year only managed to avail US$5 million from the allocated US$10 million. This fund managed to cater for only 30 companies from the initial target of 45 companies.

"Budgetary constraints militated against availing of the initial envelope, resulting in the eventual reduction of the envelope to US$5 million, which translates to a cut in the number of beneficiaries from 45 to 30 companies," reads part of the report.

The report said the availed amount would be split to cater for the 13 companies in the clothing and textile industry, representing 31% of the total envelope, five in the food industry, 10 in the metals and electrical industry, five in leather and footwear, four in the motor industry, five in the wood and furniture industry, two in the pharmaceuticals and one company in the packaging industries.

Last week the state media reported that only US$13 million had been disbursed to companies across the country from the US$40 million Distressed Industries and Marginalised Fund (Dimaf).

In Bulawayo, 13 companies are reported to have received funds amounting to US$6,5 million from Dimaf while five more companies are yet to receive a sum of US$2,9 million.

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