The Minister of Finance Baledzi Gaolathe has said that the P500 million loan that Botswana will extend to Zimbabwe under the Short-Term Emergency Recovery Programme (STERP) will be sourced through local banks and not directly f"We are going to encourage our banks to extend that line of credit," he added.
He said government is going to guarantee the bank loans which will help Zimbabwe revive its economy.
"Banks will want some sort of comfort from us looking at what is
happening in the international community (credit crunch). So the lines
of credit is not from our resources as such," he said.
There has been an outcry from the public that government is giving P500
million to Zimbabwe instead of channeling it to other uses during this
belt-tightening era.
Gaolathe said the money is not a grant but a loan that will benefit
Botswana through promotion of joint ventures between selected
corporations of the two countries.
Last week, government sent an 11-member delegation on a fact finding mission to consult and explore how it can assist Zimbabwe.
The mission consisted of government officials, BDC, BEDIA and BOCCIM representatives.
Gaolathe said after considering the mission’s report, concrete measures for use of the line of credit will be firmed up.
The minister said government is looking at assisting Zimbabwe in areas
of mutual benefit like steel, pharmaceuticals, agriculture and
manufacturing sectors.
The SADC Extraordinary Summit in Swaziland last month resolved that
member states should assist Zimbabwe implement her STERP in the form of
budget support, lines of credit, joint ventures and toll manufacturing.
The resource requirements for the programme is US$8.4 billion in the
short term. The immediate requirement will cost US$2 billion, with US$1
billion going to direct budgetary support.
Botswana’s P500 million loan will fall under the US$1 billion self- liquidating lines of credit.
Gaolathe was scheduled to leave the country yesterday for the IMF and
World Bank spring meetings in Washington. In the US, he will attend a
meeting for the Ministerial Committee of SADC Finance Ministers, which
is tasked with coordinating support for Zimbabwe recovery efforts.
The committee was established at the Swaziland summit with Botswana,
Democratic Republic of Congo, South Africa and Zambia as members.
Mmegi Online
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