Not all companies to be resuscitated

Published: 20 January 2014

Industry Minister Mike Bimha has said not all companies that have shut down have to be resuscitated and called for creation of criteria to single out those deserving special attention.

A number of companies have shut down operations due to a stifling environment characterised by a liquidity crunch, stiff competition from cheap imports and a basketful of negativities choking profitability.

While a number of initiatives to provide funding for struggling companies have been established, some have still not made it after accessing bailout funds.

Bimha, who was addressing an economic symposium, said the government had recently concluded successful negotiations with local banks to fund the manufacturing sector.

"Do we have to resuscitate everyone who is dead, is that what we would want, I do not think so," he said.

"There has to be some criteria on who we should resuscitate and probably the others we should just let them lie as they are. Probably some of the organisations have come to the end of their cycle and we should let them lie low."

Bimha, however, said some closed or struggling companies had to be resuscitated due to their strategic importance, contribution to exports, value addition and beneficiation.

Business analysts have questioned why facilities such as the Distressed and Marginalised Areas Fund (Dimaf) and the Zimbabwe Economic and Trade Revival Facility (Zetref) have been made available to all and sundry at the expense of priority institutions.

The two facilities have provided over $100 million in financial support to distressed companies.

But the question that remains unanswered is who will come up with the list of priority firms and what criteria will be used to identify them.

Local industry representative body, the Confederation of Zimbabwe Industries said recently about $8 billion was required to revive the ailing industry.

Closure of companies has left many desperate in an increasingly difficult economic environment.

Bimha said progress was also being made towards resuscitating industries in Bulawayo, with a study currently being carried out with support of the Common Market for Eastern and Southern Africa.

Once Zimbabwe's industrial hub, Bulawayo has been described as "ghost city" as the majority of companies have closed down or relocated operations.

- New Ziana.

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