Chinamasa's snubs IDC's $83m plea

HARARE - Finance minister Patrick is sticking his guns to reducing government expenditure and streamlining under-performing parastatals after he refused to write-off the Industrial Development Corporation (IDC)’s $83 million debt.

“The Industrial Development Corporation submitted a request for a direct Budget allocation of $83 million to pay-off their debts,” he said in his 2018 national budget statement. 

“Given the precarious fiscal position, IDC is being required to develop bankable projects and programmes that can be funded from the market, through such market instruments as bonds. Treasury, working together with the Ministry of Industry, Commerce and Enterprise Development, remains ready to under-write such issuances, by providing the necessary incentives,” Chinamasa added.

IDC, which is currently on the market looking at raising $100 million seed capital to kick-start its development financing operations, was last year directed by government to identify for disposal, ailing companies under its ambit that are non-core to its new mandate and in line with the country’s industrialisation strategy.

The IDC is mandated to establish and conduct any industrial undertaking, to facilitate, promote, guide and assist the financing of new industrial undertakings – including small and medium scale – schemes for the expansion, better organisation and modernisation of and more efficient carrying out of operations in existing industries and industrial undertakings.

It is also mandated to implement government policy with regard to decentralisation of industry, choice of technology and any other matter, which the Minister of Industry may specify and to take measures to acquire direct and effective control of its investments.

To that end, this is meant to ensure that industrial development in Zimbabwe maybe planned, expedited and conducted on sound business principles.

Almin Metal Industries, Amtec and Deven Engineering are some of the companies under IDC. Some of them have been struggling and draining the corporation’s financial resources.

Chinamasa said government has, over the years, provided support to local industry, through duty free importation of capital equipment, raw materials, as well as levelling the playing field between imported and locally produced goods.

“It is pleasing to note that a sizable number of local industry players is taking advantage of such intervention support measures by government to increase production and also gain market share,” he said.

In order to consolidate the gains being realised by local industry, government introduced the Furniture Manufacturer’s Rebate with effect from 1 January 2016.

The facility, which enables duty free importation of key raw materials, has resulted in increased capacity utilisation, from 60 percent in 2016 to 68 percent in 2017.

“I propose to extend the list of raw materials that can be imported under the Furniture Manufacturer’s Rebate. The extension of rebate of duty has been guided by facilitating access to goods that are not produced by the local industry,” Chinamasa said.