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Zimbabwe, Botswana Sign $64 Million Credit Facility

Zimbabwe and Botswana signed a $64 million credit facility Monday for reviving the country’s industries following years of economic decline worsened by political instability.

Finance Minister Tendai Biti and his counterpart Kenneth Matambo signed the agreement to pave the way for the disbursement of the funds which Botswana pledged at the Southern African Development Community summit in 2009 to drum up support for Zimbabwe’s coalition government.

Biti said the funds will be administered in a way that will benefit the two nations.
He said some mechanisms have been put in place to ensure that there will be no red tape in disbursing the money.

“We have de-bureaucratized this facility having taken lessons from the challenges which we encountered with the $40 million distressed and marginalized areas fund,” said Biti.

Collapsing industries in Bulawayo and other parts of the country are failing to access the fund due to state bureacratic bungling.

Matambo said the money will be availed to Zimbabwe as soon as the country provides the necessary credit guarantees.

While welcoming the credit facility, Kumbirai Katsande president of the Confederation Zimbabwe Industries, said money alone will not resolve the country’s economic challenges.

Oswell Binha of the Zimbabwe National Chamber of Commerce said they are ready to utilize the funds.

Under the facility, 70 percent of the funds will be utilized for reviving the manufacturing sector.

Targeted sectors are tourism, pharmaceuticals, agro-processing, information and communication technology, steel and leather industries.

Economic commentator Rejoice Ngwenya of the independent think-tank, Coalition for Market and Liberal Solutions, told reporter Ntungamili Nkomo while the Botswana credit facility is a good gesture, it is negligible given that the country needs a whooping $4 billion to fully revive local industries.

Meanwhile, the National Youth Council of Zimbabwe has blamed youths from Matabeleland region for not accessing the national youth empowerment fund claiming they are submitting what it says are 'unbendable' business project proposals for possible funding.

The fund being accessed by youths without collateral and administered by the Ministry of Youth and Indigenization, was set up through three banks - Stanbic, Commercial Bank of Zimbabwe and the Central African Building Society.

The ministry said of the more than 100 projects that have been funded so far, only 5 are from the Matabeleland region - sparking cries of discrimination.

The council said it is receiving mostly chicken-rearing projects from Matabeleland youths.

But Descent Collins Bajila, youth chairman of the Movement for Democratic Change formation of Industry Minister Welshman Ncube, told Studio 7’s Chris Gande the council’s allegations are unfounded.

Indigenization Minister Saviour Kasukuwere was not immediately available for comment.