THE Association for Business in Zimbabwe (ABUZ) has implored Government to facilitate direct engagement between international financial institutions and local companies to avoid red tape, which they said was slowing down access to funding.
ABUZ chief executive, Mr Victor Nyoni, said a number of financing facilities were signed with Government but have not reached businesses that are in dire need of the money to cushion their operations. He said businesses were slowly coming back to life and needed access to foreign currency to import machinery and raw materials to kick-start their operations.
“Government needs to arrange for direct contact between businesses and financial institutions such as the Africa Development Bank. The route of going via Government takes too long and there is too much red tape. As a result sometimes the facility’s effect is not then served,” said Mr Nyoni.
“Some financial facilities have been announced but we don’t see them trickling down to businesses and helping them improve their operations. There is a problem of turnaround of these agreements as they take forever. We are still struggling in terms of obtaining foreign currency. So those are some of the things that we would encourage Government to quickly jump on to.”
A number of companies are on a recovery path but still face numerous challenges including lack of working capital, liquidity constraints and inadequate foreign currency for importation of raw materials and equipment. Recently, AfDB extended a three-and-a-half-year $25 million loan facility to the local private sector that will be administered through CABS.
The facility is expected to help small to medium private players improve on their working capital, address liquidity constraints, cover the growing gap in foreign currency needs as well as import the much needed raw materials.
Confederation of Zimbabwe industries president Mr Sifelani Jabangwe has also called on Government to link emerging companies to affordable funding.
He said there was hope for economic revival following recent announcement by companies that are planning a comeback.
“A number of companies are re-opening and some are coming back. Government needs to assist these companies to get funding at the right price so that they can use it as working capital or channel it towards retooling,” said Mr Jabangwe.