INDUSTRY and Commerce minister Mike Bimha says the government has not been able to offer financial assistance to troubled local firms as it is technically broke.
In his keynote address on Wednesday at the Zimbabwe National Chamber of Commerce (ZNCC) annual general meeting, Bimha admitted the government had no financial wherewithal to save struggling companies.
“Due to limited fiscal space, the government has therefore not been able to extend financial support to industry,” he said.
“The importation of goods from other countries has contributed to widening trade deficit currently being experienced in the country. As a direct result of depressed capacity, Zimbabwe has continued to be a net importer of wide range of goods from other countries. This has greatly contributed to the widening trade deficit currently being experienced.
“The government is concerned that delays in the resolution of the country’s external debt continue to militate against efforts by both the public and private sectors to mobilise external lines of credit to recapitalise their operations and finance critical projects,” he added.
Bimha further said the government was fully aware of the negative impact of the imports and said it was important to create local productions.
“The government is also fully aware of the threat to industry posed by cheap imports. Emphasis should be on value addition and local production to create jobs locally rather than relying on cheap imports thereby creating jobs for other economies,” he said.
Bimha said strategies guiding the implementation of ZimAsset were already in place, but due to the unstable economic situation it had become difficult to implement the economic blueprint.
“Notwithstanding the significant positive gains realised in significantly taming inflation and improvement of the supply of goods and services, the economy remains regrettably fragile,” he said.
The minister said the government was aware of the challenges besetting industry and commerce and solutions would be put in place to address the challenges.
“The industrial sector continues to operate below capacity utilisation, depressed demand, high production costs, cut throat competition from cheap and substandard imports ,liquidity challenges and it is not sustainable to bring back life into them fresh capital injection is required,” he said.
“The economy is stuck in an untenable low equilibrium position characterised by low capacity utilisation, low wages, low levels of employment and low investments rate, and this is not sustainable.”