IDC companies find no takers

Published: 01 February 2018

The Industrial Development Corporation of Zimbabwe (IDCZ) has been trying to sell off some of its companies but with no takers as investors find them more of a liability than an investment, a senior official has said.

This comes as economists have argued Government needs to offload some of its enterprises, like those under IDCZ, through privatisation or commercialisation and raise funds to narrow the fiscal deficit.

General manager Fungisai Mupazviriho of IDCZ subsidiary Sunway City said IDCZ had for several years been attempting to sell off some of its subsidiaries but without any success.

"IDCZ has been trying to sell them but there are no investors willing to take up those companies and resuscitate them," she said responding to questions at the Confederation of Zimbabwe Industries (CZI) 2018 economic outlook symposium.

The symposium drew together economists and captains of industry with the hope of analysing the current economic environment and trends as well as come up with a possible outlook for 2018.

Possible recommendations for the economic turnaround strategies were also discussed at the symposium, anchored on reducing the fiscal deficit, hold inflation and promote production.

Economist professor Ashok Chakravarti said Government had too many parastatals that are not profitable but increasing fiscal pressure.

He cited the IDCZ, which he said had become a holdings company, arguing the firm needed to sell off some of the subsidiaries to private investors and generate more funding as well as boost production of such companies.

"The problem has been high fiscal deficit and should be brought down to zero. I do not agree with restructuring of parastatals but to privatise them through joint ventures and commercialise.

"For instance, IDCZ has over 20 companies which does not make sense. It should help in the incubation of more private companies and help them grow," he said.

IDCZ is supposed to be a self-financing national development finance institution wholly owned by Government with interests in the manufacturing sector, mining, vehicle assembly and chemicals production.

Prof Chakravarti added the private sector were engines for growth and therefore had a bigger role to play in the turnaround of the economy.

Economists and industrialists at the symposium concurred the impetus for growth in 2018 was there driven by positive sentiment after the country was ushered into a new political dispensation late last year.

As such, industry and local firms needed to take advantage of the prevailing positive sentiment to lure investment into their businesses and achieve ultimate economic growth.
- the herald

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