UK ex­tends $100m to Zim as ties im­prove

The Herald (Zimbabwe) - - Front Page - Tendai Mu­gabe Se­nior Re­porter

THE United King­dom and the Stan­dard Char­tered Bank have part­nered to lend Zim­bab­wean com­pa­nies in the pri­vate sec­tor US$100 mil­lion in a move de­scribed by Gov­ern­ment as a sign of con­fi­dence in its poli­cies aimed at trans­form­ing the econ­omy into a mid­dle in­come by 2030.

Re­serve Bank of Zim­babwe (RBZ) Gov­er­nor Dr John Man­gudya con­firmed the de­vel­op­ment say­ing the fa­cil­ity would go a long way in im­prov­ing the firms’ com­pet­i­tive­ness.

This is the first di­rect com­mer­cial loan to Zim­babwe by the UK gov­ern­ment in over two decades.

“This is a sig­nif­i­cant move in that it is a medium-term fa­cil­ity to be used for the re­vival of com­pa­nies in Zim­babwe,” said Dr Man­gudya.

“There has been a deficit of medium-term fund­ing which was not forth­com­ing to Zim­babwe. This is go­ing to im­prove the com­pet­i­tive­ness of the in­dus­try in Zim­babwe in terms of re­tool­ing and im­prove­ment of pro­duc­tiv­ity.”

Dr Man­gudya added: “More im­por­tantly, it is a sign of con­fi­dence that the in­ter­na­tional com­mu­nity has found in Zim­babwe. It is a seal of ap­proval or en­dorse­ment of Gov­ern­ment poli­cies and mea­sures aimed at trans­form­ing the econ­omy into a mid­dle in­come by 2030.

“From the RBZ side, we are pleased by this fa­cil­ity be­cause it will in­crease ex­ports by Zim­bab­wean com­pa­nies.”

The CDC, which is the UK’s de­vel­op­ment fi­nance in­sti­tu­tion, will share the de­fault risk on loans to pro­vide for­eign ex­change to the Zim­bab­wean busi­nesses.

CDC chief ex­ec­u­tive Mr Nick O’Dono­hoe said they

had been pre­par­ing the loan fa­cil­ity from the day for­mer pres­i­dent Mr Robert Mu­gabe left of­fice.

“We think it’s pretty sig­nif­i­cant,” he said.

Mr O’’ Dono­hoe said the last di­rect CDC loan to Zim­babwe was to a fish farm in 1994.

“We are not aware of any com­mit­ments that have been made by any­body since the change of gov­ern­ment,” he said.

This comes at a time when Pres­i­dent Mnan­gagwa had promised to hold cred­i­ble elec­tions.

It is un­der­stood that the CDC and Stan­dard Char­tered are fi­nal­is­ing a list of com­pa­nies that can ac­cess loans.

Com­pa­nies in food pro­cess­ing, man­u­fac­tur­ing and agri­cul­tural sec­tors are likely to ben­e­fit.

The loan will be for up to three years and can be used for cap­i­tal ex­pen­di­ture or work­ing cap­i­tal.

“Zim­babwe’s econ­omy has been shat­tered over the last two decades, yet holds real po­ten­tial,” said Mr O’Dono­hoe.

“If a new gov­ern­ment in post-elec­tion Zim­babwe en­cour­ages in­vest­ment and pro-busi­ness poli­cies, Zim­babwe can be one of the great in­vest­ment suc­cess sto­ries of the next decade.”

Mr Su­nil Kaushal, re­gional chief ex­ec­u­tive of Stan­dard Char­tered Bank, said the loan fa­cil­ity was sim­i­lar to that of a pre­vi­ous part­ner­ship with the CDC when the two lent to Sierra Leone at the height of the Ebola epi­demic in 2015.

Pres­i­dent Mnan­gagwa’s ad­min­is­tra­tion is on a mis­sion to turn around the econ­omy by open­ing up the coun­try to For­eign Di­rect In­vest­ment (FDI).

The Pres­i­dent is also fight­ing cor­rup­tion which was ram­pant dur­ing the Mu­gabe era and frus­trated ef­forts by some in­vestors to come to Zim­babwe.

Pres­i­dent Mnan­gagwa also wants to ease the do­ing of busi­ness in the coun­try by en­sur­ing that po­ten­tial in­vestors are at­tended to within the short­est pe­riod of time.

The coun­try has at­tracted over $11 bil­lion in FDI pledges ever since Pres­i­dent Mnan­gagwa took over from Mr Mu­gabe and is on a pos­i­tive eco­nomic tra­jec­tory ex­pected to cre­ate em­ploy­ment.

Dr Man­gudya

Mr O’Dono­hoe

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