Don't mortgage minerals — WB

HARARE - The World Bank has warned Zimbabwe against mortgaging its minerals, saying this jeopardises future generations’ welfare.

Nadia Piffaretti, the World Bank’s senior economist,  told a news conference on Wednesday that the hard-pressed southern African nation would be better advised to seek loans at concessionary rates instead of securitising its minerals to secure loans.

“Securitisation of minerals is one way of financing things,” Piffaretti said.

“However, it brings a lot of risks. It’s not an easy solution because you might end up giving away more than you are getting.

“It’s not really advisable at your development stage because you might just take away the future of your children.”
Piffaretti said instead, Zimbabwe must seek loans, which have clear-cut terms and conditions.

“Securitisation is a legitimate tool in the toolbox but it is not advisable,” she warned.

This comes as Zimbabwe, which is struggling to secure $27 billion to finance its economic blueprint ZimAsset, recently directed diamond firms to deposit their gems with the Reserve Bank of Zimbabwe as part of wider efforts to secure external loans by securitisation of minerals. 

Zimbabwe has an external debt of approximately $10,7 billion.
However, China — considered an all-weather friend of Zimbabwe — has indicated that it wants the southern African country to use its minerals to guarantee future loans.

Faced with a biting liquidity crisis and the urgent need to recapitalise industry and increase its capacity, which fell from an average 44,6 in 2012 to about 39,6 percent in 2013, government is making frantic efforts to mortgage the minerals to the emerging Asian giant.

Thabani Nyoni, the Bulawayo Agenda director, recently said while there was nothing wrong with Zimbabwe funding its development with minerals, the earmarked deal with China raises a lot of concerns.

“What they are doing is tantamount to mortgaging the country because government agreed to securitise with minerals it does
not know how much they are worth,” he said.

Nyoni noted it was not clear whether the deal, although adhering to the ZimAsset proposals, did not violate other government policies such as beneficiation and indigenisation.

Securitisation of minerals is one of the proposals made in the Zanu PF government’s economic blueprint, ZimAsset, to fund development for the next four years.

Comments (101)

Vataurireyiwo pamwe vanganzwe tatambura veduwe

Nyamhangambiri - 13 June 2014

sure the whole issue of sustainability vanishes if we start mortgaging our minerals. the resources will not sustain future generations.

imagine - 13 June 2014

Who do you tell? ZanuPF running a colony on behalf of China. Our President is now resident governor of Chinese Republic of Zimbabwe.

Maita Manyuka - 13 June 2014

Quick fixes is not the solution

kt - 13 June 2014

The issue is even ZANU PF knows what is right. They know they are killing the economy. I pray that one day they will put the future of the nation against personal aggrandisement. Please slogans do not move the economy and neither is rigging elections a confidence builder.

New Tekere - 14 June 2014

Hola. ¿Necesita un préstamo personal o de negocios sin estrés y rápido aprobación? Si es así, por favor póngase en contacto con nosotros, ya que ahora estamos ofreciendo préstamos a tasa de interés preferencial. Nuestro préstamo está garantizado y seguro, para más información y aplicaciones, por favor responda a este e-mail. raphealloanfirm@gmail.co

Rappheal Rich - 9 November 2014

Hello. Do you need personal or business loan without stress and fast approval? If so, please contact us as we are now offering loans at prime interest rate. Our loan is secured and safe, for more information and applications, please reply to this e-mail. roberto.finance02@hotmail.com

Robert Smith - 9 November 2014

I WANT TO APPRECIATE MR WILFRED EHIS of guaranteeloanfirm28@yahoo.com for sincerely helping me with a loan amount of $13,073, after i was recently scammed of $670 by denis smith of devlinsloanloan@outlooks.co.uk. mr ehis is really one of a kind,if you are interested in securing a loan to start up a business or to consolidate your debt, or to start up a project of any-kind, apply for a loan from wifred ehis on via email www.guaranteeloanfirm28@yahoo.com am so happy.

celia - 1 December 2014

Hello everyone I am Mr. Khan, a well know good investor, i will grant you all kinds of loans you need because our services are reliable. I give out loans at 3% interest rate and from a duration of 6 months to 25 years. My work is trusted and guarantee, reliable and quick, fast and understanding. So i urge you now to apply because application is open to those above 18+. Contact us through our email today at rockstarfirm2@yahoo.com I await your swift application so that we can help you out with what you want. Pelle Khan

Pelle Khan - 3 January 2016

Post a comment

Readers are kindly requested to refrain from using abusive, vulgar, racist, tribalistic, sexist, discriminatory and hurtful language when posting their comments on the Daily News website.
Those who transgress this civilised etiquette will be barred from contributing to our online discussions.
- Editor

Your email address will not be shared.