Minister clarifies Zim’s $18bn stimulus package

HARARE – The implementation of the $18 billion Covid-19 stimulus financing for the private sector is still ongoing and the Government is providing only 50 percent guarantee through local banks.

Finance and Economic Development Minister, Professor Mthuli Ncube, said this in Parliament as he clarified concerns regarding the fund and how certain businesses have accessed it.

This was after legislators had asked why the Treasury was guaranteeing private companies and how are these beneficiaries were selected.

Several private sector leaders have also said they were facing challenges in accessing the funds through banks to which the Treasury has pledged to intervene.

“This is the implementation of the $18 billion Covid-19 response package that we put in place to support companies to come out of the Covid-19 situation.

“Our approach within that programme is to provide guarantees so that we work together with banks to

actually provide the loans, we as the Government provide the guarantee and it is never 100 percent. We provide 50 percent,” Prof Ncube explained.

“So, the bank is not covered for the other half as we cover 50 percent and this has worked well in terms of these companies and we will be doing more going forward.”

Prof Ncube urged more business to utilise the funding saying the advantage was that the Government does not have to outlay resources, but was able to leverage and unlock these from the banks to support the private sector. “Without the guarantees, the banks would not do it and then we are stuck as an economy. We are trying to move forward and this is part of the $18 billion rescue

package,” said the minister.

He also explained the selection process for beneficiary companies, which he said was thorough and vigorous as entrepreneurs have come forward and request through banks.

“The banks having processed the requirement for funding of the projects, if they think that it is a viable project, they will approve it. The bank and the project promoter then approach their ministry and Treasury simultaneously,” said Prof Ncube.

“There is a committee in Treasury, a debt management committee that looks through this and analyses.    Some of them have been rejected by the way, and some have been accepted.”    – THE HERALD, Zimbabwe.