HARARE, May 7th – Zimbabwe has secured an additional credit line of $250 million from the African Export-Import Bank (Afrexim) to help its economic reconstruction and plans to issue a bond by July, Finance Minister Tendai Biti said on Thursday.
The southern African country’s new unity government, formed by rivals President Robert Mugabe and Prime Minister Morgan Tsvangirai, has said it requires $8.3 billion to rebuild an economy shattered by years of hyper-inflation and contraction.
Although much of the funding is expected to come from sceptical Western donors, who have demanded more reforms from the new administration, Zimbabwean officials are also looking at raising about $1 billion from the African continent.
“The future will involve the bank committing to provide lines of credit to the tune of $250 million that will be used to support … the gold and tobacco sectors as well as provide liquidity for banks and grain imports,” Biti told reporters after meeting Afrexim officials in Harare.
“The bank has also agreed to work with us to facilitate a diaspora bond, which will be open to Zimbabweans living abroad and other investors. We can’t give you the (issue) figure. It’s a matter we are still discussing with the bank, but the bond should be floated by July 1,” Biti said.
Zimbabwe has already secured $400 million credit to revive its manufacturing sector from regional bloc the Common Market for Eastern and Southern Africa (COMESA) as well as neighbours South Africa and Botswana.
The International Monetary Fund (IMF) said on Wednesday its board had decided to partially lift the suspension of technical assistance to Zimbabwe and would provide help in targeted areas, starting from May 4.
The IMF said in a statement it would help Zimbabwe with tax policy and administration, payments systems, banking supervision and central banking governance.
Former U.N. Secretary-General Kofi Annan and South African Nobel laureate Archbishop Desmond Tutu — members of a group of prominent figures known as The Elders — said on Thursday the group had written to donor countries and the European Commission urging them to respond more swiftly on aid to help stabilise Zimbabwe.
“The inclusive government needs more support to ensure that it can initiate the urgent stabilisation and early recovery programmes that the people so desperately need,” Tutu, chairman of The Elders, said in a statement.
“Now is not the time for donors to take a ‘wait and see’ approach. This is the best chance Zimbabweans have had for peace and prosperity in decades.”
Zimbabwe will also receive $178 million in fresh credit from the regional Eastern and Southern African Trade and Development (PTA) Bank to fund mining and agriculture and provide liquidity to its banks, Finance Minister Tendai Biti said on Thursday. “There are two facilities — one for $185 million — and already $82 million has been drawn for the mining sector and for the agro industries. There is also a second facility of 80 million dollars for banks, there has been a draw-down of $5 million. So all in all there is a fresh line of credit of a total of 178 million,” Biti said.
Reporting. Reuters
