Ncube sets tough conditions on $18 billion Covid-19 rescue package access

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By Alois Vinga

FINANCE Minister, Mthuli Ncube has set tough conditions on firms intending to benefit from government’s $18 billion Covid-19 rescue package in what could almost be impossible for players to access the fund.

A statement by Treasury recently says companies applying for the productive sector facilities worth $10.6 billion will be required to submit valid tax clearance certificates from the Zimbabwe Revenue Authority accompanied by a record of tax compliance history.

“Firms must also submit compliance certificates from the National Social Security Authority and credit worthiness as assessed by banks.

“Priority to be given to existing projects while new projects will be considered in the health sector if they result in the localisation of supply chains,” Ncube said.

Players in the tourism sector will also be expected to be registered with the Zimbabwe Tourism Authority for the Tourism Sector Support Fund.

Defaulters and non-performers under previous facilities are not eligible.

Under the initiative, interest rates for the productive sector have been lowered to not more than 20 % and existing qualifying loans must be restructured to allow businesses to recover.

Loan restructuring will also entail review and relaxation of regulatory guidelines and benchmarks.

The guidelines come at a time most firms were struggling to comply with such regulatory standards due to a poorly performing economy.

A grace period of up to three months will be given to allow businesses to effectively recover from the effects of the Covid-19 pandemic.

The Reserve Bank of Zimbabwe has been tasked to accommodate banks with liquidity needs as part of its lender of resort function and the funds will be released to banks via a reduction on the statutory reserve requirements for banks.

The Small to Medium Enterprises sector has been allocated $500 million amid plans to recapitalise Empower Bank, Zimbabwe Women’s Microfinance Bank, Small and Medium Enterprises Development Cooperation and the Post Office Own Savings Bank for SMEs to access the funds.

“Grace period of up to 90 days will be given to SMEs, with the maximum tenure of loans being determined by the lending institutions in line with their credit policy,” Ncube said.

The Youth Ministry will administer $20 million allocated to the artists and athletes’ sector and applicants will access the fund in line with guidelines which will soon be issued by the Ministry.

The Treasury boss also announced that duty on selected raw materials starting from April 1, 2020 to December 31, 2020 have been significantly relaxed in order to reduce the cost of the production and to contain imported inflation.