Industry engages govt on polls

HARARE - The Confederation of Zimbabwe Industries (CZI) has engaged government in a bid to raise funds to ensure a hassle-free election that guarantees business certainty and a conducive operating environment.

Traditionally, Zimbabwe’s polls have been marred by violence which in turn scares away investors and destabilises business. The country is expected to hold watershed elections this year — in which President Robert Mugabe squares off long-time rival Prime Minister Morgan Tsvangirai — but the dates are yet to be announced.

In his state of the economy address last week, Finance minister Tendai Biti said industry was trying to assist government in ensuring that the forthcoming polls don’t ruffle business.

“CZI has approached us to issue bonds so that their members can assist government in raising funds and we are still yet to conclude negotiations,” Biti said.

“Although our budget may not be able to sustain more bonds and negotiable certificates of deposit (NCDs) we commend industry for such a noble initiative,” he said.

Biti said government has already raised $20 million from $40 million 365-day Treasury Bills issued to the National Social Security Authority and Old Mutual.

Kumbirayi Katsande, CZI’s president, confirmed the proposal.

He said issuance of Treasury Bonds could be a feasible solution to raise funds for government given the pressure on the fiscus to finance its obligations.

“We have made these suggestions before, and we are convinced that there will be takers for what will be a good investment vehicle for some companies,” Katsande told Daily News, adding that the proposal had been made before and seemed to be the best option for the authorities.

“We have this experience as a country and it is a matter of doing what we have done before,” he said.

Previously, CZI — an industry representative body — has pointed out that elections were a cause for concern as they created a challenging environment to conduct business.

“We have already advised (businesses) that we should budget for the usual potential disruptions to normal business activity in election times as we all expect polls in 2013,” he said.

Industry is currently reeling from low capacity utilisation with the manufacturing sector declining from 2011’s figure of 57,2 percent to 44,2 percent last year.

However, Biti reiterated that the country would need foreign donor support, particularly from United Nations, to fund the polls, which require approximately $132 million.

The cash-starved government had only budgeted $25 million.

Government is currently struggling to fund its national budget amid a slowdown in economic growth to 4, 4 percent last year from a 9,3 percent growth rate in 2011.

Biti said the economy remained “very depressed” with tax revenues below target so far this year while government expenditure, especially the salary bill, continuing to rise.

Last year, diamond companies realised a total $800 million gem sales, but remitted only $45 million to government. - Kudzai Chawafambira

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