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Industry Minister: CABS Let Down Distressed Companies

  • Gibbs Dube

Industry Minister Welshman Ncube says the Central African Building Society (CABS) has let down distressed industries in Bulawayo as it has failed to disburse $10 million obtained from treasury almost six months ago.

Ncube told VOA Studio 7 government is partly to blame for the sloppy handling of the $40 million Distressed and Marginalized Areas Fund which was set up by the state in conjunction with Old Mutual Insurance more than a year ago to bail out firms crippled by lack of finance.

He said the $10 million should have been chanelled to his ministry for disbursing to industries. Only two firms in Bulawayo have so far benefited from the fund as more companies continue collapsing due to viability problems.

Ncube said the shutting down of companies in Bulawayo is seriously affecting residents and surrounding areas.

Bulisani Ncube, former manager of the Bulawayo branch of the Zimbabwe National Chamber of Commerce said distressed industries should now seek foreign partners in order to survive.

According to the Ministry of Industry and Commerce, at least $3 million has so far been disbursed to 10 companies out of 49 applicants nationwide. Project proposals of up to $73 million have been shelved.

CABS, a subsidiary company of Old Mutual Zimbabwe which provided half of the $40 million finance package, was demanding that firms should provide two-year audited financial statements, clean tax records, sound credit ratings and collateral security before accessing the fund.

President Robert Mugabe officially launched the Distressed and Marginalized Areas Fund to resuscitate the firms in Bulawayo amid pomp and fanfare.

But lack of action has brought dismay in the City of Kings, once regarded as Zimbabwe’s industrial capital.

Most residents, business leaders and some opposition political parties say the fund has become a national disgrace.

More than 20,000 people lost their jobs between 2009 and 2010 following a decade of economic decline.