HomeLocal NewsBotswana ready to extend credit line to Zimbabwe

Botswana ready to extend credit line to Zimbabwe

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Botswana says it is ready to implement the P500 million credit facility extended to Zimbabwe under the Short-Term Economic Recovery Programme in 2009.

This was revealed by that country’s Finance and Development Planning deputy secretary Kelapile Ndobano last Wednesday while addressing the Botswana Confederation of Commerce, Industry and Manpower (BOCCIM) in Gaborone.

Ndobano said the draft agreement was submitted to Zimbabwe in April, adding the documents have since been incorporated and resubmitted to Zimbabwe for further consideration.

“We are ready for implementation of the facility any day,” Ndobano said.

Ndobano said Botswana was committed to the credit facility in line with the extraordinary Southern African Development Community summit decision of March 30 2009 in Swaziland urging member states to support Zimbabwe following the formation of the inclusive government.

He said they were waiting for Zimbabwe to approve the facility in Parliament.

Zimbabwe is also expected to provide a guarantee and indemnity to Botswana for the risk or exposure.

The Botswana Export Credit Insurance Company (BECI) has pledged to enter into subsidiary finance guarantee agreements with participating local banks.

Ndobano said there would be a steering committee comprising stakeholder ministries, Bank of Botswana, BOCCIM and BECI to provide policy guidance and direction to the fund administrator.

“Given that the government of Zimbabwe will be providing a counter guarantee and indemnity to the government of Botswana, the Zimbabwe government will be informed of project approval, criteria and processes before any disbursement is made,” said Ndobano.

The Bilateral Investment Promotion and Protection Agreement was signed in March after the two governments recognised the existence of vast investment opportunities between them.

Ndobano said the credit facility would be a once-off arrangement up to a maximum of P500 million whose continuation would be determined by adequate and beneficial implementation of the initial drawdown.

“At the end of the five-year period, there will be a review to determine whether to continue or wind up,” he said.

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