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Govt rescue fund nowhere to be seen

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TOURISM operators, like other sectors of the economy, have not benefitted from the ZW$18 billion Covid-19 and Economic Recovery and Stimulus Package announced by President Emmerson Mnangagwa last May amid revelations the government has, in fact, not yet not yet released any funds.

NOKUTHABA DLAMINI
Environment, Tourism and Hospitality Industry minister Nqobizitha Mangaliso Ndlovu (pictured) told The NewsHawks the legislative framework needed to release the funds has not yet been put in place, almost a year after the fund was announced.

Trade unionists and business organisations such as the Confederation of Zimbabwe Industries, Zimbabwe National Chamber of Commerce and Hospitality Association of Zimbabwe have expressed frustration over the unavailability of the funds.

Under the facility, the government announced it had set aside ZW$6.08 billion to support agriculture, ZW$3.02 billion as working capital fund and ZW$1 billion for the mining support fund.
Tourism, which is one of the hardest hit sectors, was allocated ZW$500 million, the same amount reserved for small and medium-scale enterprises.

Tourism players, including those in the country’s prime tourist destination – Victoria Falls – have however not received anything from the stimulus package, which is proving to be pie in the sky.
Quizzed about the package, Ndlovu said the money had been put on hold due to various technical glitches.

“As government, we have not yet specifically availed that funding,” Ndlovu said. 

“We did make a promise that we will put ZW$500 million to the tourism revolving fund, but this funding has not been successful due to technicalities which the ministry of Finance is working on because they said for such a fund to be availed there should be some legislative framework backing it in the form of an Act,” Ndlovu said. 

The minister, however, said upon realising that the government could not afford to provide the sector with grants due to pressing humanitarian issues, a decision was then taken that banks should offer loans to tourism companies. However, that, too, has not materialised.

“We know that there is need for support for the sector but because of the other needs to support people, for instance with food, we then said we will provide a loan guarantee for these companies to borrow from their banks, and in the event that the bank will be worried about defaults and risks, government pledged that should they fail to pay, we will clear their loans,” Ndlovu said.

“This was up to ZW$500 million but unfortunately we have had a major problem from the banking side.

“They have been turning down our business operators’ applications, so we are yet to understand the problem but we have agreed that we will sit down and go through their applications that have been turned down by the banks before going to Treasury for guarantee.”

For one to qualify for the loan scheme, they need to apply for a loan from their bank and the application papers are then taken to the ministry who then forward the request for a loan to Treasury. 

Clement Mukwasi, the president of the Employers Association for Tours and Safari Operators, said most companies closed without collecting money for services provided, salaries and other overheads that were due and a bailout is desperately needed. 

“We rentrenched about three quarters of our staff, so basically almost all those who were in non-managerial positions were rentrenched or their contracts were terminated because companies could not sustain the salaries,” Mukwasi said. 

“The people who owed us for the services that we had rendered before the outbreak of the virus did not manage to pay us, and we also did not manage to pay the creditors so it has actually became very chaotic in the industry and most companies will not be able to see the daylight even after having opened (business) at the end of the pandemic.”

Mukwasi said the industry was now pinning its hopes on the government’s rescue loans following an announcement on Monday by the Zimbabwe Tourism Authority (ZTA) that companies which applied for loans should forward their information for consideration. 

“We have been busy with that compilation that should be presented to cabinet so there is lot of energy amongst industry operators, and we think that we might benefit from the recovery fund,” Mukwasi said. 
“So far, Mbano Manor Hotel has benefitted, and we think that there could be some more money lying there which people could access and revitalise their businesses after a year of total shut.” 

The tourism sector contributes about 6% of Zimbabwe’s gross domestic product.

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