LIVINGSTONE MARUFU
Treasury will next year provide ZWL$44.3bn to the State-owned development finance institution, the Industrial Development Corporation of Zimbabwe (IDCZ), to support long-term working capital and retooling funding for local businesses, which has been a significant constraint, Business Times can report.
The development was revealed by Finance, Economic Development and Investment Minister, Professor Mthuli Ncube.
In order to supplement the Treasury funding, Professor Ncube said, IDCZ will also be going out to bid for additional onshore and offshore funding.
“Government will continue to facilitate the mobilisation of medium to long-term funding to support retooling and working capital of the local industry through negotiating offshore lines of credit and capacitation of the IDCZ to enable it to meet the financial needs of the local industry.
“In this regard, ZWL$44.3bn has been set aside to capitalise the IDCZ,” Professor Ncube said.
He added: “Qualifying companies are encouraged to approach the institution for financial support.”
IDCZ’s placement under the Mutapa Investment Fund, according to Professor Ncube, is anticipated to attract fresh capital from possible investors, especially the financial industry, to strengthen its balance sheet.
The corporation has evolved its operations to include funding industry in response to the need to reindustrialise and retool the manufacturing sector through the Industrial Capital Fund with the Government of Zimbabwe playing a pivotal role in availing the funds for such retooling through the Treasury.
According to Professor Ncube, the funding is only available to businesses engaged in manufacturing, value addition, and the beneficiation of locally produced raw materials. It can take the form of debt, equity, or any other structure that is mutually agreeable and appropriate for the specific projects at hand.
Projects that follow import substitution, exports generating investments, and the national development strategy will be prioritised.
The IDCZ was established in 1963 through the IDCZ Act (Chapter 14:10), which allows the corporation to promote investment and economic co-operation across all sectors.
The diversified conglomerate’s subsidiaries include Zimbabwe’s largest fertiliser manufacturing company Chemplex Corporation which operates five divisions including Dorowa Minerals, Zimbabwe Phosphate Industries (ZimPhos) and G.D Haulage.
Other units for IDCZ are Sunway City, Willowvale Motor Industries and Deven Engineering.
Associate companies include Olivine Industries, Sino Zimbabwe Cement Company, Zimbabwe Grain Bag, Madzone Enterprises and Afroran Spinners.
IDCZ was established to conduct any industrial undertaking, to facilitate, promote, guide and assist the financing of new industrial undertakings, schemes for the expansion, better organisation and modernisation of and more efficient carrying out of operations in existing industries and industrial undertakings.
