Govt mulls more funding options

08 Oct, 2018 - 00:10 0 Views
Govt mulls more funding options Finance and Economic development Minister Prof Mthuli Ncube (left) announces Transitional Stabilisation Policy reforms agenda for Vision 2030 while flanked by his permanent secretary George Guvamatanga, in Harare yesterday. — (Picture by Memory Mangombe)

The Herald

Africa Moyo Senior Business Reporter
GOVERNMENT is considering a number of funding options for distressed firms, including crowdfunding and setting up a Venture Industrialist Fund, in a bid to accelerate the re-industrialisation programme aimed at creating more decent jobs for citizens.

Crowdfunding is loosely defined as a method of raising money through asking a number of backers to invest relatively small amounts in exchange for equity shares in the business.

Venture industrialists are generally long-term investors, who usually want association with a project from start to finish, incorporating innovation and efficiency in the business model.

Long-term investment has been lacking in the country since adoption of multiple currencies in 2009. In the long-term, Government wants the private sector to lead in the sourcing of funds to resuscitate industry.

Government will only come in to provide guarantees, where possible, said Industry and Commerce Minister Nqobizitha Mangaliso Ndlovu on the sidelines of the tour of Norton industries last week. “I am in discussion with the Minister of Finance (and Economic Development Professor Mthuli Ncube).

“We have an idea of creating Venture Industrialist Fund and even crowd-fund, for re-tooling),” said Minister Ndlovu.

Government wants to resuscitate the manufacturing sector, which has been in the doldrums in the last 20 years owing to the twin terrors of inflation and sanctions imposed by the West.

In his campaign message ahead of the July 30 harmonised elections, President Mnangagwa promised to create jobs, fight corruption, promote development, re-engaging the international community and national unity.

The President pledged to create jobs in the agricultural, manufacturing, mining, tourism and service sectors as well as infrastructural development projects such as road, energy and airport construction. Minister Ndlovu said going forward, Government wanted the private sector to lead the revival of industries.

“ . . . our thrust is to allow our private sector to lead economic growth so we will also advise them to find alternative sources of funding where Government can come in, be it in the form of guarantees or any other way, we can then discuss that as we go.

“But we want the private sector to also have that latitude to find alternative sources of funding,” said Minister Ndlovu.  He said the tour gave Government “a human touch” so that the needs of producers can be attended to.

“We have come here (Norton) and we have seen impressive manufacturing taking place. All we need as Government is to support them. This (tour of factories) informs policy formulation.

“The TSP (Transitional Stabilisation Programme) complements what Government is doing, to devise a policy that is tailor-made to support local production,” said Minister Ndlovu.

Prof Ncube launched the TSP last Friday in Harare.

Reads part of the TSP: “In order to enhance competitiveness of industries, the Transitional Stabilisation Programme will institute measures that address underlying causes of high cost of doing business, including inputs supply across various value chains, access to enabling public utilities, domestic cost of finance, and introduction of flexibility in Zimbabwe’s labour laws.”

International private equity firms have already started extending funds to Zimbabwe. The United Kingdom-based duo of Gemcorp Group and CDC, have extended US$250 million and US$100 million respectively, to Zimbabwe recently.

CDC had not extended funds to Zimbabwe since 1994, an indication that the country’s perception across the globe is changing, with CEO Mr Nick O’Donohoe saying they were preparing the US$100 million facility since the departure of former President Robert Mugabe.

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