Govt to increase Dimaf

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THE government is working on increasing the Distressed Industries and Marginalised Areas Fund (Dimaf) to finance industrial recovery following a further plunge in capacity utilisation this year largely due to financial constraints.

GAMMA MUDARIKIRI
OWN CORRESPONDENT

In an interview with Southern Eye Business yesterday Industry and Commerce minister Mike Bimha said he was in discussion with Finance minister Patrick Chinamasa on increasing the fund, initially pegged at $40 billion, to improve the financing of the ailing industry countrywide.

Bimha could, however, not disclose how the government intended beefing up Dimaf.

“I’m not yet in a position to disclose much detail on how much we will increase Dimaf as we are still in discussions with ministry of Finance over the issue,” he said.

The government has been slow in disbursing the initial $40 million of the Dimaf fund. Treasury has so far released $19 million of the fund, a drop in the ocean considering the huge working capital which industry needs to recapitalise.

Industries in Bulawayo require over $73 million in the short term to recover.

Bimha said the government was still working on declaring Bulawayo a special economic zone to attract investment in the city currently facing a myriad of challenges.

Recently, Bulawayo Business Arise submitted proposals challenging the government to declare Bulawayo a special economic zone.

According to the pressure group, economic zones have propelled the economic development of countries such as China, India and South Africa as they offer incentives that are favourable to investors.

Zimbabwe, however, continues to struggle to attract investment due to policy misalignments — chiefly the indigenisation law.

The indigenisation law calls for foreign firms to cede 51% of their shareholding to locals which, however, has been blamed for scaring away investment.

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