Under the Distressed Industries and Marginalised Areas Fund (Dimaf) government and Old Mutual set aside a US$40 million fund to revive companies in Bulawayo.
The money is disbursed through CABS and there are concerns that the bank is taking time to release the funds desperately needed by companies in Bulawayo to stay afloat.
Writing on the social networking site, Facebook, Ncube poured his heart out reflecting his frustration over the manner in which the money is being released.
“All we want is for CABS to revisit the conditions because I have said this over and over again that they assume that the fund is for healthy companies yet it is for distressed companies,” Ncube said.
“It is impossible to apply conditions for healthy companies to the distressed ones on Dimaf funds, conditions causing delays in companies receiving funds.”
Ncube becomes the second senior government official to express concern over the delay in releasing the cheap funds.
Recently, Reserve Bank of Zimbabwe governor, Gideon Gono, urged companies to hold demonstrations at the ministries of Finance and Industry and Commerce against the slow disbursement of the funds.
According to initial terms of the fund, government and Old Mutual through were supposed to contribute US$20 million apiece into the fund. Old Mutual contributed its share through CABS but government is yet to avail US$20 million.
“What has happened since then is that CABS has its own share (from OMZ), but it doesn’t have government funds nor does it have government guarantee (and) there is no agreement in place between the parties,” CABS managing director Kevin Terry recently told Parliament’s portfolio on industry.
According to Terry, currently $3, 9 million worth of lines of credit have been approved under the CABS fund.
Of that amount, US$3 million has been disbursed while the bank is currently taking all the risk, lending a maximum of $1 million per company, payable over two years at 10% interest per annum.
While it is taking longer than expected for the funds to be released, thousands of companies are closing leaving workers stranded.
Last year alone about 87 companies ceased operations.
Analysts say the revival of Bulawayo companies has been politicised with parties in the inclusive government using the fund to curry favour with the electorate in the upcoming elections.
“…revitalisation of industry in Bulawayo has already been politicised, with the country’s three main political parties (Zanu PF, MDC and MDC-T) positioning to score cheap political goals from the issue,” the Zimbabwe Coalition on Debt and Development said in a report titled, A Contribution to the Ongoing Debate on the De-industrialisation of Bulawayo.