GWERU - Industry minister Welshman Ncube has accused Finance minister Tendai Biti of holding Zimbabwe’s economy at ransom by not availing funds to resuscitate struggling industries.

Ncube — responsible for overseeing industry’s “health” — said his ministry was frantically trying to revive collapsing firms, efforts which demand Biti’s financial support.

Biti is supposed to bail out the country’s clambering companies through two key facilities — the Distressed Industries Marginalised Funds (Dimaf) and Zimbabwe Trade and Industry Revival Facility (Zimtref).

“I am saddened by the prolonged process in availing funds set to be disbursed to kick-start failing companies. The funds needed to meet our primary proposals are yet to be unveiled, while a few companies have benefited from the scheme in Bulawayo,” Ncube told businessdaily in Gweru.

He said the future of Zimbabwe’s industries heavily depended on the immediate provision of the funds.

“CABS has not disbursed even a quarter of the $40 million allocated for failing companies under Dimaf, while more than half of the funding allocated under Zimtref is yet to be disbursed. This has resulted in little progress towards boosting our industries,” he said.

“It’s surprising to hear a bank demanding proof from applicants whose firm is a failing company.”

Zimbabwe’s industries, particularly in Bulawayo, have failed to recover since the decade-long economic decline with firms failing to access funding in the current dollarised economy.

In his 2013 national budget, Biti said government would embark on second phases of Dimaf and Zimbabwe Economic Trade Revival Facility (Zetref) with more funds to be disbursed. He allocated $70 million for Zetref.

However, independent economist Eric Bloch has said the figures for both funds were too little compared to at least $1 billion Bulawayo alone requires to resuscitate its industries.

“My concern is that it’s not as much as needed. Nevertheless with over $100 million, at least 80 companies will be assisted. So I think transformation is nigh,” Bloch said.

Last year, at least 85 firms in Bulawayo closed shop due to viability problems.

Capacity utilisation in the manufacturing sector has dropped by 13 percent to 44 percent in the half-year to June owing to liquidity constraints as most firms failed to access long-term lines of credit. - Alfred Tembo