News / Local
Distressed Industries and Marginalised Areas Fund is "useless"
05 Aug 2012 at 02:37hrs | Views
Industry and Commerce Minister Professor Welshman Ncube says the Distressed Industries and Marginalised Areas Fund (Dimaf) is "useless'' and will not solve the problem of deindustrialisation in Bulawayo due to the delays and conflicts regarding its disimbursement, a Cabinet minister has said.
Ncube told the state controlled Sunday News that it was unfortunate that development projects that were meant for the Matabeleland region were not coming to fruition but he was not going to easily give up and would fight to ensure that transparency prevails.
Prof Ncube said Dimaf was proving to be ineffective as there was no progress in the disbursement of the fund and the few companies that had benefited were not even from Bulawayo, with the situation at the city's industries now worse.
The sentiments by the minister come at a time when the business community challenged the Central African Building Society (Cabs) to publish the names of beneficiaries of the fund.
Ironically, Prof Ncube was the chairperson of the Cabinet taskforce that recommended the establishment of the fund so as to help in the revival of the city's industries.
He was also instrumental in a proposal to have the Parliament of Zimbabwe relocate to the city so as to help spearhead development.
"As it stands that fund is just useless, it is basically not there and I don't see names of any beneficiaries being published because there aren't any and I don't see there being any in the near future, in short the machanism we helped establish is not working.
"The writing is clear on the wall on its ineffectiveness, the US$10 million that was released by Government has not even been disbursed while of the US$20 million contribution by Old Mutual only US$4 million has been released and none of it was to Bulawayo companies and neither was it to production related companies therefore you can clearly see that this is not working,'' said Prof Ncube.
The minister refuted claims by CABS that they had distributed over US$10 million to distressed firms countrywide saying to the best of his knowledge there was no progress at all with regards to the disbursement of the fund.
He further alleged that it was not true that there were some Bulawayo firms that had benefited as alleged by the bank.
Prof Ncube said the major problem that was being faced in the city was that more companies were either closing or were on the verge of closing while the fund was still being toyed around with.
"I will not however easily give up or be deterred in my fight to finally see industries in the city fully functional. I will fight till the end because that fund has been sitting in some office since April which in itself is very disappointing,'' said the minister.
Prof Ncube said only companies with a foreign parentage were likely to survive as the crisis in the city continues to worsen.
"While capacity utilisation continues to be pegged at an average of 57 percent, there is no space for growth at all. They have reached a stagnant point, and as long as we don't get any cash injections through direct foreign investment, the situation will certainly worsen.
"Besides, investors are now taking a wait-and-see attitude so I can safely say we are not going to have any significant changes to this issue of deindustrialisation. The only companies that are likely to pull through are those with a foreign parentage,'' he said.
Meanwhile, the minister said he was continuing with his fight to have Parliament moved to Bulawayo as this was one of the key strategies to bring development to the region.
"Such projects take time, if you believe in them you have to keep fighting. It's like a series of battles that you have to win, honestly bringing Parliament to the city is a matter of national interest because such things bring the development we have always clamoured for,'' said Prof Ncube.
More than 85 companies have closed shop in Bulawayo alone with an estimated 20 000 workers losing their jobs.
According to statistics that were recently released by CABS US$10 113 250 was approved to local companies as of last month with US$6 775 000 of that money having been reportedly disbursed to Bulawayo firms.
When the deal was signed last year in October, the Government and Old Mutual pledged to deposit US$40 million, each contributing US$20 million.
The Ministry of Industry and Commerce has said it has sent about 60 applicants to CABS for consideration for funding.
At some point Prof Ncube indicated that the Government was considering taking over the disbursement of the fund from CABS.
Ncube told the state controlled Sunday News that it was unfortunate that development projects that were meant for the Matabeleland region were not coming to fruition but he was not going to easily give up and would fight to ensure that transparency prevails.
Prof Ncube said Dimaf was proving to be ineffective as there was no progress in the disbursement of the fund and the few companies that had benefited were not even from Bulawayo, with the situation at the city's industries now worse.
The sentiments by the minister come at a time when the business community challenged the Central African Building Society (Cabs) to publish the names of beneficiaries of the fund.
Ironically, Prof Ncube was the chairperson of the Cabinet taskforce that recommended the establishment of the fund so as to help in the revival of the city's industries.
He was also instrumental in a proposal to have the Parliament of Zimbabwe relocate to the city so as to help spearhead development.
"As it stands that fund is just useless, it is basically not there and I don't see names of any beneficiaries being published because there aren't any and I don't see there being any in the near future, in short the machanism we helped establish is not working.
"The writing is clear on the wall on its ineffectiveness, the US$10 million that was released by Government has not even been disbursed while of the US$20 million contribution by Old Mutual only US$4 million has been released and none of it was to Bulawayo companies and neither was it to production related companies therefore you can clearly see that this is not working,'' said Prof Ncube.
The minister refuted claims by CABS that they had distributed over US$10 million to distressed firms countrywide saying to the best of his knowledge there was no progress at all with regards to the disbursement of the fund.
He further alleged that it was not true that there were some Bulawayo firms that had benefited as alleged by the bank.
Prof Ncube said the major problem that was being faced in the city was that more companies were either closing or were on the verge of closing while the fund was still being toyed around with.
"I will not however easily give up or be deterred in my fight to finally see industries in the city fully functional. I will fight till the end because that fund has been sitting in some office since April which in itself is very disappointing,'' said the minister.
Prof Ncube said only companies with a foreign parentage were likely to survive as the crisis in the city continues to worsen.
"While capacity utilisation continues to be pegged at an average of 57 percent, there is no space for growth at all. They have reached a stagnant point, and as long as we don't get any cash injections through direct foreign investment, the situation will certainly worsen.
"Besides, investors are now taking a wait-and-see attitude so I can safely say we are not going to have any significant changes to this issue of deindustrialisation. The only companies that are likely to pull through are those with a foreign parentage,'' he said.
Meanwhile, the minister said he was continuing with his fight to have Parliament moved to Bulawayo as this was one of the key strategies to bring development to the region.
"Such projects take time, if you believe in them you have to keep fighting. It's like a series of battles that you have to win, honestly bringing Parliament to the city is a matter of national interest because such things bring the development we have always clamoured for,'' said Prof Ncube.
More than 85 companies have closed shop in Bulawayo alone with an estimated 20 000 workers losing their jobs.
According to statistics that were recently released by CABS US$10 113 250 was approved to local companies as of last month with US$6 775 000 of that money having been reportedly disbursed to Bulawayo firms.
When the deal was signed last year in October, the Government and Old Mutual pledged to deposit US$40 million, each contributing US$20 million.
The Ministry of Industry and Commerce has said it has sent about 60 applicants to CABS for consideration for funding.
At some point Prof Ncube indicated that the Government was considering taking over the disbursement of the fund from CABS.
Source - SN
