The Sunday Mail
GOVERNMENT is considering a number of funding options for distressed firms, including crowd funding and setting up a Venture Industrialist Fund, in a bid to accelerate the re-industrialisation programme aimed at creating more decent jobs for citizens.
Crowd funding 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 capital refers to start-up or growth equity capital provided by private investors, again in exchange for equity in the business.
In the long-term, Government wants the private sector to lead in the souring 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 thinking of creating a Venture Industrialist Fund and even crowd-fund for retooling,” said Minister Ndlovu.
Government wants to resuscitate the manufacturing sector, which has been in the doldrums for the last 20 years owing to the twin terrors of inflation and sanctions imposed by the West.
The Zanu-PF manifesto for the concluded July 30 harmonised elections was anchored on job creation, fighting corruption, development, re-engagement and unity.
Zanu-PF 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 wants 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 manufacturers. This (tour of factories) informs policy formulation.
“The TSP (Transitional Stabilisation Programme) complements what Government is doing, to devise 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 respectively extended US$250 million and US$100 million 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 Mr Robert Mugabe.
