Golden Sibanda Senior Business Reporter
Government plans to establish a Special Purpose Vehicle (SPV) to mobilise funding from external institutions to support local industry. Industry and Commerce Minister Mike Bimha said the SPV was mooted in view of the fact that the Industrial Development Corporation may encounter challenges raising funds since it had been targeted under Western sanctions.
He would not say how much required to be raised as the funding needs of industry vary while support would also depend on priorities, but industrialists contend industry requires $8 billion.
Minister Bimha said the SPV was one of several options that Government was looking at to mobilise the requisite funding to support the revival of the manufacturing industry.
“IDC may have some issues since it was under sanctions, we are therefore still deciding on the need to set up a Special Purpose Vehicle.
“This is because you want some institution that is there to support industry, deriving authority from Government,” he said.
The strategy is informed by Government’s position as pronounced in the Zimbabwe Agenda for Sustainable Socio-Economic Transformation economic policy covering 2014-2018.
Minister Bimha said IDC itself might have to establish the SPV, with approval of and guarantee from Government to circumvent challenges presented by the embargo on the company.
The minister said the SPV would be complemented by other efforts already underway, including Memoranda of Understanding Government was about to sign with financiers.
For its part, the IDC will be reconfigured to focus on development finance for the local industry, Minister Bimha said, to secure funding to support the distressed domestic industry.
In this regard, under Zim-Asset the IDC will be recapitalised and its operations refocused as one of the key investment vehicles to assist ailing manufacturing industries.
Minister Bimha said Government would look at prioritising funding, for instance targeting export companies, and not look at industry’s every funding need since some companies and products had been overtaken by technology.
“What we need to do is to identify what should be done. Some companies need to retool to modernise equipment and reduce costs of operating, in some cases it’s a combination of both equipment and technology,” the minister said.