LIVINGSTONE MARUFU
The Industrial Development Corporation (IDC), a wholly government- owned development financing institution, should fund emerging businesses with potential instead of being used for the bailout of traditional firms such as the now-defunct Zimbabwe Iron and Steel Company (ZISCOSTEEL), the Zimbabwe National Chamber of Commerce (ZNCC) has said. ZNCC made the call in its report submitted to Parliament last week.
“The IDC should be transformed into an institution which supports industrial development as per its mandate focusing on low hanging fruits like developing industries in line with the new digital economy rather than bailing out traditional industries like ZISCOSTEEL.
“IDC should incubate micro-small to medium enterprises, with potential, for a time period until they can stand on their own.
About 95% of start-ups are failing to survive for at least five years which is a clear indication that the current industrial support system is not effective,” reads part of the ZNCC report to Parliament.
Recently, Finance and Economic Development Minister, Mthuli Ncube (pictured) said the government will continue to extend incentives to local industry to drive domestication of value chains while diversifying the export revenue basket. He said the plans would see financial capacitation of IDC so that the State entity starts supporting industry that will contribute to the agenda.
Ncube said the incentives to be granted include rebates on equipment in order to create an environment conducive for business to succeed.
“To industry, we are going to give support through the IDC, which is running a finance development arm, so that it starts taking equity on financing companies that it deems as strategic.
“We will be giving incentives for the value chain agenda. We want to domesticate value chains and we have given quite a bit of incentive in terms of rebates on equipment but generally to ease the economic environment to companies that are undertaking value addition,” Ncube said.
Through the National Development Strategy 1 (NDS) Ncube said the government would focus on the provision of incentives to improve the appetite to enhance value addition for export. The Treasury chief said the incentives were meant to strengthen local value chains.
He further cited cotton and leather value chains as an immediate port of call while pointing to the need to enhance the horticulture sector particularly the cultivation of blueberries and flowers.
Ncube indicated that the vision 2030 of a middle-income economy would be enhanced if value chains were efficiently executed.
“Higher incomes are always possible if there is value addition in sectors such as agriculture. In NDS1 we would want to support that initiative.
“We are targeting the cotton sector value chain, especially garment manufacturing. We are also targeting the leather value chain, the other one is the horticulture sector, blueberries and flowers, we want to support the farming of those as well because they are export-oriented,” he said.
