The recently signed P500 million line of credit from Botswana is yet to be operationalised, amid indications the Zimbabwe government is still compiling paper work regarding guarantees for the funds. Zimbabwe and Botswana signed the agreement to start accessing the facility on September 3.
Report by Mernat Mafirakurewa Acting Business Editor The funds were pledged at the formation of the inclusive government in 2009, but there were delays in tying the deal due to demands for assurances from Botswana.
The line of credit would assist distressed manufacturing firms and other sectors to revive their operations.
Confederation of Zimbabwe Industry chief executive officer Clifford Sileya yesterday bemoaned the long waiting period companies have had to endure.
He said the value of the fund had declined from $70 million to $64 million as a result of exchange rate fluctuations during the last three years.
“We are desperate for the funds. It has taken too long for us to access those funds,” Sileya said.
Last year, the two governments signed a bilateral investment promotion and protection agreement (Bippa) to pave way for the release of the funds.
A Bippa is an agreement establishing the terms and conditions for private investment by nationals and companies from countries involved.
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At least 70% of the money would be channelled towards the country’s ailing manufacturing sector with the remainder spread across various sectors of the economy.
Correspondence between the industry representative body and the Finance ministry shows that Zimbabwe is still working on the guarantee and legal opinion documents required before the process of accessing the fund can be opened.
Sileya said the understanding was that once the documents were in place, the application guidelines for the funds would be made available.
“We are in contact with the government about this matter and will keep pushing,” he said.
Local companies desperately need fresh working capital to replace obsolete machinery.
Speaking at the signing ceremony early this month, Finance minister Tendai Biti said the government had removed bureaucracy in the disbursement of the facility to avoid unnecessary delays. The funds would be accessed through two windows of short and medium-term funding.
Short-term funding would cover requirements of up to six months, particularly working capital, and the medium-term credit would have a tenor of up to five years, depending on the financing needs.
