Agribank recieves US$30 million line of credit

HARARE - Zimbabwe's Agricultural Development Bank (Agribank) has received $30 million in fresh credit from the regional Industrial Development Corporation (IDC) of South Africa to fund agriculture and provide liquidity to the bankrupt bank. The fresh six-year US$30 million line of credit was extended at a signing ceremony in Harare Friday.

Agribank chief executive Somukosi Malaba said it was the first major financial package proffered to the bank since a unity government was formed two years ago.

The funds will be made available to “critical” industries including food processing, agro-processing and indirectly to the farmers. Of the US$30m, US$20m will bankroll agriculture related activities and US$10m will provide liquidity to the IDC of Zimbabwe.
“The facility should lead to job creation and will also help increase agricultural productivity by improving access to inputs at affordable prices by farmers,” Malaba said.
“It will also address the general lack of liquidity that has resulted in the absence of clearly defined funding for agriculture from the banks.”
Finance minister Tendai Biti said the credit line will help the agrobased southern African country’s economy, that was vandalised by years of economic contraction and hyper-inflation, to recover.

A unity government formed by rivals President Robert Mugabe and Prime Minister Morgan Tsvangirai has appealed for billions of dollars from the West.
Biti said the line of credit is the first deal sticthed by government after the signing and ratification of the Bilateral Investment
Promotion and Protection Agreement (BIPPA) between South Africa and Zimbabwe.
“It addresses the challenge of limited lines of credit and the lack of long-term financing within the economy,” he said.
Western donors, who are expected to provide the bulk of funding for Zimbabwe’s economic recovery, have demanded broad economic and political reforms, forcing Zimbabwe to look at neighbouring countries for help. Two weeks ago, Zimbabwe entered another US$70million deal with Botswana that will bankroll Zimbabwean industry with loans at
concessionary rates.
Biti, a senior official with Tsvangirai’s Movement for Democratic Change (MDC), said there was commitment from Western donors to help Zimbabwe but said this hinged on the unity government dealing with what he termed its “toxic” issues.

Post published in: Economy

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