Delay in disbursing $40M DIMAF worsening the situation for Bulawayo companies

by Staff reporter

2012 August 19 23:20:13 | 1820 Views

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Bulawayo's de-industrialisation has reached crisis levels and there is urgent need for Government and other stakeholders to put a halt to this negative development that is causing a lot of suffering to workers and their families.

It seems the hardest hit are the textile companies that are facing stiff competition from cheap imports.

The city has seen more than 80 companies closing in the past few years leaving more than 20 000 workers jobless and out of this figure about 20 companies that closed are textile companies.

The latest textile company to be affected by cheap imports is Belmore Clothing Manufacturers which has already advised its workers that it is winding up operations at the end of October.

The management of the company which employs more than 300 people has since held meetings with the workers to discuss the issue of severance packages.

Many companies in the city are on the brink of closure and there is urgent need to help these companies survive.

The delay in disbursing the $40 million Distressed Industries and Marginalised Areas Fund is worsening the situation for Bulawayo companies.

CABS which was assigned the responsibility to disburse the funds has announced that it has so far disbursed $10 million, a figure being disputed by companies. When the Dimaf deal was signed last year, Government and Old Mutual pledged to deposit $20 million each into the fund meant to assist ailing Bulawayo companies.

Old Mutual is reported to have met its part of the bargain but Government has only released $10 million. What is however worrying is the bickering regarding the disbursement of the fund.

Many companies that are supposed to benefit from the fund have complained of stringent conditions that a company has to meet to access the funds.

Government should, without further delay, release the remaining $10 million and then push CABS to speed up the disbursement of the fund.

Government leaders have repeatedly pledged their commitment to see Bulawayo regaining its status as the countryâ€™s industrial hub but there is no action on the ground.

What is needed now is practical action to assist ailing companies survive as well as assisting those that have closed to re-open. Dimaf should however be viewed as just one of the avenues to assist the ailing companies survive.

Captains of industry and commerce in the city should cast their nets wide and explore other ways to assist their companies survive instead of just looking up to the $40 million which many are agreed is not enough to assist all the ailing companies in the city.

Managers at the different companies in the city should take seriously the announcement recently by Zimbabwe's Ambassador to South Africa Phelekezela Mphoko that there were many business opportunities in SA.

Ambassador Mphoko said he was ready to assist Bulawayo businesspeople to create synergies with their South African counterparts.

He said business people in the city should take advantage of his office to access information on investment opportunities in SA.

The prevailing situation in Bulawayo calls for companies to be innovative in order for their products to compete with imports.

There is need to come up with technologies that cut on production costs so that the prices of products can compete with imports. We want to once again call on the Government and other stakeholders to spring into action and save Bulawayo industries.

Source: TC