industrial.jpgIndustry has called on government to urgently relax lending conditions for the US$40 million value addition facility for distressed companies in order to increase export earnings.

The sentiments from industry are being made at a time when companies are failing to access credit lines sourced by government from external financiers owing to the stringent conditions.

The Parliamentary Portfolio Committee on Industry and International Trade Chairman, Cde William Mutomba said the success of the value addition strategy will depend on the removal of tight lending conditions on loans sourced by government for on-lending  to firms by banks.

“We have noticed that industry is failing to recapitalise due to tight liquidity and an urgent solution is needed,” said Cde Mutomba.

Responding to submissions from  industry on cheap loans for value addition on locally produced goods, the Permanent  Secretary in the Ministry of Industry and Commerce, Mrs. Abigail Shonhiwa said relevant authorities are in talks to ensure that companies can access funds for value addition and productivity expansion at concessionary interest rates.

“We are aware of the situation and we hope that we will introduce a favourable lending scheme,” Mrs. Shonhiwa said.

Government has in the 2012 National Budget introduced a value addition strategy which is aimed at processing raw materials from agriculture, mining and other primary producing sectors into finished commodities.

However, economic experts say the failure by treasury to introduce loan facilities at affordable rates will result in the policy failing to achieve the intended objectives.