EU to advance Zim $300m

HARARE - The European Union (EU) is set to advance Zimbabwe $300 million in funding support after the bloc lifted decade-long trade restrictions on the southern African country.

Last week, the EU indicated that it would, from 2015, start a $300 million five-year funding programme to support Zimbabwe’s health, agriculture and governance initiatives.

Zimbabwe requires approximately $27 billion, more than double the size of its economy, to fund an ambitious five-year economic plan, ZimAsset — targeted at improving basic services, food security and infrastructure rehabilitation.

Philippe Van Damme, the EU ambassador to Zimbabwe, said the trading bloc was ready to engage Zimbabwe after years of isolation.

“I think we have reached an important stage of normalising relations with Zimbabwe. The step we have taken is not a final step, but a very important one. What we need now is to rebuild trust,” said Van Damme.

This comes as fears of another economic recession are looming in the country on the back of massive company closures, low foreign direct investment, lack of cheap credit lines, power outages and a general economic decline.

Recently, Finance minister Patrick Chinamasa revised Zimbabwe’s economic growth forecasts from 6,1 percent to 3,1 percent due to low aggregate demand and the country also risks failing to fund its 2015 National Budget following indications that the national tax collector recently missed its third quarter revenue collection by nine percent.

In another development, which analysts said brought confidence in the country, a British business delegation visited Zimbabwe last week for the first time in nearly 20 years.

The business delegation was looking for ways the British companies can help the cash-strapped government in Harare raise money to fund its economic programmes.

Britain’s new ambassador to Harare, Catriona Laing, said the business group, made up primarily of consultancy firms, wanted reassurances about the safety of investments and information about the black economic empowerment law that requires foreign-owned firms to sell majority stakes to locals.

“This visit is very important because it will hopefully lead to the private sector coming back and pursuing the opportunities they have identified,” Laing said.

Denmark’s Trade and Development minister, Morgens Jensen, is also expected in Zimbabwe this week to explore possible commercial opportunities between the Nordic country and the southern African nation.

The country’s embassy said Jensen — who is the first senior politician from a Western nation to officially visit Zimbabwe since the elections in 2013 — will also assess progress on Danish-funded projects.

In 2002, the EU suspended bilateral co-operation with the country’s government and had been channelling all humanitarian support through no-governmental organisations. The decision to lift the Zimbabwe trade sanctions was officially endorsed last weekend.

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