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Treasury yet to disburse US$30m industry bailout

by Staff reporter
23 Jul 2022 at 07:32hrs | Views
TREASURY is yet to disburse about US$30 million it promised to industry under the Special Drawing Rights (SDR) to boost capacity utilisation and save some firms from total collapse.

This was revealed on Wednesday by Industry deputy minister Mavis Sibanda during a workshop on monitoring of SDR projects facilitated by Southern African Parliamentary Support Trust.

"The Ministry of Industry was allocated US$30 million for the manufacturing sector, meant to finance the value chains and rural industrialisation. To date we have not yet received funds but we are engaged with the Ministry of Finance," Sibanda said.

The SDR is an international reserve asset created by the IMF to supplement the official reserves of its member countries.

Zimbabwe received US$961 million under the SDR in August last year.

Government had said the SDR funds would be deployed towards productive sectors including industry, agriculture, mining, infrastructure investment covering roads, among others.

But several months on, Sibanda said industry is yet to receive anything.

"We have submitted our concept note as to how we want the funds to be utilised and they have agreed with us.  We are working with Ministry of Finance.

"US$30 million is a lot of money. Some companies don't need much money but we believe that if the money is disbursed, the  companies will be able to re-tool," Sibanda said.

A recent survey of 440 manufacturing firms by the Confederation of Zimbabwe Industries showed that capacity utilisation — actual output measured against potential production capacity — increased to 56,25% in 2021, from 47% the previous year.

Parliamentary Budget Office representative Tatenda Munyikwa  said: "SDRs allocation is still grossly insufficient compared to the magnitude of the development financing needs and challenges needed for strict monitoring.

"Parliament should demand disclosure of such information to enable public dialogue."

Source - NewsDay Zimbabwe