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Minerals to back $10b China loan, Mugabe
31/07/2014 00:00:00
by The Source
 
We can borrow on the strength of our minerals ... President Mugabe on Thursday
 
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THE country has no money to fund implementation of its five-year ZimAsset economic blueprint and will use its resources to mobilise the capital, President Robert Mugabe said on Thursday.

Zimbabwe, which is reported to be in negotiations with the Chinese for a $10 billion loan, requires $27 billion to fund ZimAsset which runs from 2013 to 2018.

“… but the resource that is important for us to generate the activity that make the wheel of ZimAsset start to grind, that resource is not adequate,” Mugabe said in reference to funding while addressing senior Zanu PF members during celebrations of the party’s victory in last year’s general elections.

“That’s a resource that, now as we look around, ask outsiders and talk to countries that are friendly towards us, that can be borrowed on the strength of the natural resource that lies under or on our part of mother earth.”

On May 6, outgoing Chinese embassy economic and commercial counsellor Han Bing told The Source in an exclusive interview that Beijing wanted Harare to use its mineral proceeds to guarantee any future loans.

He said in principle, the funding request and use of minerals as collateral has already been accepted and that the China Import and Export Bank and officials from the ministry of finance were working on technical details of the arrangement.

Finance Minister Patrick Chinamasa recently admitted that China, among other potential donors and investors, remain apprehensive about extending financial aid to debt-ridden Zimbabwe.

But the economy has stuttered since President Mugabe and his Zanu PF party won the elections one year ago and is choking on a liquidity crunch that has forced government to revise its 2014 growth figures to 3.1 percent from 6.1 percent.

But President Mugabe said while the economy might not appear to be on the mend to the majority of people, it was on track to recovery.

He said government was putting in place modalities for the economy to tick.

“So when we say there is a rise now in the economy, some may not understand it but those inside will understand from the preparations that there are initiatives that have been taken and the resources that are flowing albeit gradually,” he said.

“Yes people might say the economy is not grinding, but certainly it does take time to grind and as long as you have your initiators in the right place and you know you are getting the resources, you are injecting the resources into the economy, the machine will in due course start to grind faster and faster until the rate of grinding is as we desire.”



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He said the objectives of ZimAsset would not all be attained at the same time but at different stages.

Government, he said, was now emphasising a movement away from raw material exports to beneficiation as a means to improve not only the quality of goods but foreign currency earnings for the country.


 
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