COVID19News

Govt to unveil bailout package for struggling businesses

Finance and Economic Development Minister, Professor Mthuli Ncube, says the government will announce a recovery package for businesses that are crumbling due to the lockdown.

The finance minister disclosed this in Bulawayo after touring Ekusileni Medical Centre, which has been earmarked as a national COVID-19 treatment centre.

The business sector has also called on the government to come up with a recovery package that covers the whole spectrum of the country’s economy, as both informal and formal sectors were severely affected.

As President Emmerson Mnangagwa announced the lockdown, his administration came under fire for failing to announce relief financial schemes for businesses that were to close shop for the 21-day hiatus.

In South Africa, the Small-Business Development Ministry spearheaded an R500million in government support directed at the nation’s small businesses – the sector of the economy expected to be hardest hit by that country’s lockdown period.

Responding to questions from the media on Friday, Prof Ncube said the government had a two-pronged approach to save lives and livelihoods in Zimbabwe.

He explained that saving lives, was about prevention, testing and treating COVID-19 which included quarantining those from outside Zimbabwe, including social distancing of which the lockdown and extension was part of that.

The other approach, Prof Ncube said, was saving livelihoods, by helping struggling businesses.

“Another leg is to support companies so that people retain jobs. We don’t like people losing their jobs as we want to create more jobs. So we want to be able to support companies to retain, to expand access to working capital.

“You will see us, I think in the next few weeks announce a recovery package again to deal with those issues and watch the space on that we will come back to you on that,” said the finance minister without providing much detail as to how much the recovery package was.”

Prof Ncube said as part of saving livelihoods, the treasury would also support those who have lost their incomes through cash transfers.

“One million people have been identified so far and would be paid ZWL$200 a month for the next few months to keep going. Also, we have another cash transfer of ZWL$180 a month to cover the roller meal subsidy because if you can’t find the roller meal, the option is you receive cash in lieu of roller meal especially for those in urban areas,” he said.

“We have been focusing on urban areas because in the rural areas we are already giving out free food anyway as part of our support for the vulnerable. I think what you will see during this COVID 19 response is  a stronger shift towards supporting social protection programmes that is critical.”

Zimbabwe National Chamber of Commerce (ZNCC) Matabeleland Chapter president Golden Muoni told CITE the country’s economy was already in trouble without COVID-19.

“We are in a crisis that exists in another crisis. Business has more problems than you can believe and more are going to come. People are going to lose their jobs,” he predicted.

Muoni said even if the recovery package were to be made available, the economy was on its knees.

“As to whether the package has come late or early, or even if it came yesterday or last week businesses have already been affected. The 21 days was no joke. The economy consists of 70 percent informal markets who make up the bulk of the economy, as an estimated US$2 billion to US$3 billion circulates there,” he noted.

The industrialist advised Prof Ncube to come up with a package that caters for both sectors, taking into account the prevailing context.

“I don’t know what structure this recovery package will be in but the finance minister must look at the whole spectrum of the economy. If you look at the formal sector, it has been the most affected with tax obligations, rentals, overheads and so on,” Muoni lamented.

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