Zim pursues SA, Botswana loans

HARARE - Zimbabwe is still pursuing the multi-million dollar loans pledged by Botswana and South Africa (SA) following establishment of the country’s coalition government nearly four years ago, Finance minister Tendai Biti said.

In 2009, the regional countries, including Angola, promised to lend broke Zimbabwe nearly $200 million to help restart the country’s economy — battered by a decade-long recession — but the funds are yet to be released.

Last Thursday, Biti said government had fulfilled all conditions precedent to receive the Botswana P500 million loan — concluded in 2012 — aimed at financing productive sectors.

“Government of Botswana is yet to declare effectiveness of the facility,” he said while presenting his mid-term policy.

Currently, Zimbabwe is struggling to access funding from multilateral lenders such as the International Monetary Fund (IMF) due to perceived country risk and a huge domestic and foreign debt.

The southern African country owes IMF in excess of $10 billion.

Biti noted that South African and Zimbabwean governments are negotiating the implementation framework of the $100 million facility promised by the former to fund industry revival.

This comes as the SA loan caused a stir last April with the country’s legislators questioning South African Reserve Bank governor Gill Marcus over its disbursement.

“We need to be clear. This is a government to government discussion. Should there be any agreement on terms and conditions, whatever they are, they would be sorted out at government level. Once that is done we would simply be the executing arm, we are not involved in the discussion we do not know any more than you do. I thus cannot answer your questions about the conditions,” she has been quoted as saying.

Meanwhile, Biti said “a feasibility study has been carried out to ascertain intervention areas where India can come and support us with $100 million line of credit to improve healthcare delivery in the country.”

The Treasury chief said Zimbabwe is also finalising frameworks of cooperation with Angola and Brazil, which promised to advance to the country $50 million and $98,6 million respectively.

“I would also like to applaud the African Development Bank (AfDB) for approving a $400 million Trade Finance Business Plan (TFP) on February 20, 2013,” he said.

The prime objective of the plan is to provide significant trade finance support for imports and exports across the vital economic sectors in Zimbabwe and the continent.

It will cover sectors such as agriculture, food, and corporate and financial institution clients in Africa, including Zambia.

This is the first time AfDB had signed such bilateral risk-sharing partnership with a bank.

The three-year facility would support trade flows of approximately $3,6 billion in intermediate and finished goods, and raw materials and equipment in Africa.

The programme aims to support economic growth to foster development of the financial sector and to promote regional integration.

The facility involves an unfunded risk participation of $200 million, where Standard Chartered Bank would match AfDB’s undertaking in every transaction, bringing the total maximum portfolio to $400 million.

The facility is established based on a 50/50 risk sharing agreement.

As a leader in trade finance, Standard Chartered Bank promotes trade across Africa where the Bank has operations in 15 markets and where Standard Chartered Bank’s facilitates has over $10 billion of trade annually.

AfDB trade finance programme aims at supporting more than $10 billion volume of trade over the next four years.