92 companies have closed shop in Bulawayo

THE number of companies that have closed shop in Bulawayo has increased to 92, increasing the number of workers losing jobs to nearly 25 000 as the city continues to slide into full time de-industrialisation.

The situation is dire, as more companies are either retrenching workers or scaling down operations pending closure, a situation that might see the number of companies ceasing operations in the city rising to above 100 by the end of the year.

Industry and Commerce Minister Professor Welshman Ncube conceded that Bulawayo would soon be totally de-industrialised if efforts to revive the city companies come to naught.

"At the moment the number of companies that have closed has risen to 92," he said.

"Still there are a number of obstacles that have not allowed the Government to fully participate in trying to avert the situation."

Prof Ncube said Government has come up with a stop gap mechanism to avert further damage although the intervention would virtually bring no change.

He said the continued secrecy behind the disbursement of a mere US$10 million that Government had deposited with CABS as part of the Distressed Industries and Marginalised Areas Funds  was worrying and they had come up with two alternatives to unlock the resources.

"The Minister of Finance will be meeting officials from CABS to see how this issue can be handled. But we have already discussed two options. First the bank can go ahead and distribute the money if we solve the sticking issues or alternatively we can withdraw the money and disburse it directly to the companies."

He said as a desperate measure, the Government has also come up with a deliberate position to benchmark distribution of the money.

"The money is far from enough but we have set a cap where each of the companies that applied will get a maximum of US$300 000."

However analysts say such a paltry payout was not enough to even cater for a wage bill of some companies worse to buy the expensive machinery.

Prof Ncube said although he is the superintendent of industry he cannot be the sole target of criticism on this problem.

"No," said Prof Ncube when asked whether the fact that industry, a portfolio directly under him, was struggling would put a dent on his CV.

"This cannot be a Welshman problem alone. In Government we take collective decisions. Yes if we are to say the whole Government has failed Bulawayo I will admit but we cannot zero it (failure) to one person. I basically identify the problems facing my portfolio and present to the Cabinet. Right now it is the duty of Finance Ministry to release the money for industry. He also argues that he does not have the money. You see it becomes a chain that involves everyone in Government. It is like when teachers go on strike demanding wage increases, you cannot say the Minister of Education is to blame alone."

Bulawayo, once the industrial hub of the nation, has been slowly suffering from de-industrialisation as companies either relocated or closed shop completely.

A Government taskforce chaired by Prof Ncube came up with DIMAF, a joint project between Government and Old Mutual where the two parties were to contribute US$20 million each to pool a fund to revive companies in the city.

However, the fund has been mired in controversy, with Government failing to contribute fully its potion while Old Mutual through CABS has indicated that there have tried to disburse the money at bank rates as Government was failing to meet its end of the agreement.

This resulted in the bank giving out the loans to companies not necessarily from Bulawayo. Recently it announced that it has disbursed more than US$4 million to needy companies under the fund.

Most local companies that applied for the fund were turned down raising anger among business community that argued that the Government was not doing enough to protect the city.