FORMER Finance minister Tendai Biti has cast aspersions over the Zanu PF government’s capacity to negotiate mineral-based loan deals with foreign firms, adding that as long as the situation remains unchecked, the economy would continue operating in the woods.
Addressing stakeholders attending a debt dialogue conference organised by the Zimbabwe Coalition on Debt and Development in Harare on Tuesday, Biti revealed that prior to the formation of the inclusive government in 2009, Zanu PF gave Anjin Corporation an 100 000-hectare platinum concession worth an estimated $52 billion in exchange for a $200 million loan for agricultural inputs.
He said the signing of the deal confirmed government’s lack of negotiating skills.
“Anjin, under some other name, were granted over 100 000ha concession for platinum in the Selous area in exchange for a $200 million loan used to procure agriculture inputs. This deal was not prudently concluded considering that platinum at that time was selling for $2000/ounce and therefore the resource could be valued around $52 billion,” Biti said.
He added: “This can be attributed to the government’s lack of geological information as the last geological survey was done in 1968. We need science and expert geologists to help us qualitatively quantify what resources we have.”
The deal is one of several where Anjin got minerals in exchange for loans extended to Zimbabwe. The same company was also given significant concessions at Chiadzwa diamond fields in exchange for a $98 million loan used for the construction of the National Defence College.
Zimbabwe has defaulted on its debt repayments since 1999 and to date some 88% of the debt is now in arrears.
The Treasury debt office established last year confirmed that the public-guaranteed debts as at December 31 2013 stood at $6,9 billion. The major creditors are World Bank, the Paris Club and International Monetary Fund (IMF). The debts, however, do not include the Reserve Bank $1,5 billion debt and private companies’ external loans.
Under the new economic blue-print, the government is looking at using its minerals resources to leverage debt repayment.
Meanwhile, the IMF mission has since said Zimbabwe does not qualify for debt cancellation under its Highly Indebted Poor Countries programme.