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Industry seeks clarity on SDRs funds – The Herald

The Herald
Oliver Kazunga Senior Business Reporter
THE local industry will seek clarity on modalities of accessing the US$80 million which Government has allocated to the productive sectors from the US$958 million Special Drawing Rights (SDRs) Zimbabwe received from the International Monetary Fund (IMF), an official has said.
In an interview, Confederation of Zimbabwe Industries (CZI) president Mr Kurai Matsheza, whose organisation represents local manufacturers said their members were yet to be informed on the modalities to access the funds.
“(While) the Minister of Finance and Economic Development (Professor Mthuli Ncube) did indicate towards the end of last year; the modalities of accessing facilities allocated to the productive sectors from the SDRs . . . our members are still to be apprised with the finer details.
“We are still waiting for the finer details from the Minister. We are hoping in our next meeting end of this month or early next month, we will seek the finer details from the Government after which information will be communicated to our members,” he said.
Out of the US$80 million, the manufacturing sector was allocated US$22,5 million, tourism US$7,5 while US$20 million will go towards development of irrigation facilities for smallholder farmers.
The SDRs allocated to the productive sectors represents 8,4 percent of Zimbabwe’s total SDRs allocation.
Last year, the Treasury said companies seeking to access the funds needed to apply through participating banks, which will then conduct normal credit assessments and due diligence through the risk sharing and co-financing models.
Applications should include a letter of support from the line ministry.
The approved applications will then be forwarded to the Treasury through line ministries for final approval.
The loans will be accessed at lower than normal commercial rates.
“The resources, though not sufficient to bring the desired impact to the productive sectors, we appreciate the gesture by the Government as it will assist in transforming the productive sectors to a certain extent.
“For example, the US$22,5 million being allocated to the Industry Retooling for Equipment and Replacement for the Value Chain Revolving Fund is inadequate, but is transformational in a way,” said Mr Matsheza.
The productive sector requires fresh funding for retooling to improve efficiencies and boost output as the Government seeks to cut imports of manufactured products and create jobs in line with the National Development Strategy 1 (NDS 1), the country’s medium-term economic blueprint.
In his 2023 Budget statement, Minister Ncube said the transformation of the manufacturing sector would be sustained through the value chain revolving fund, Zambia-Zimbabwe Agro-Industrial Park, domestic production of fertilizers as well as several new investments in the sector, including the integrated iron steel plant in Manhize.
However, growth of the manufacturing sector was expected to slow down to 2,6 percent in 2022, before gaining momentum to 4 percent in 2025. This growth will be anchored on expected better performance of the primary sectors of agriculture and mining, as well as a conducive macroeconomic environment.
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