China funds Zim SMEs

The Development Bank of China will provide US$30 million to fund small and medium-scale enterprises in Zimbabwe as Beijing looks to strengthen ties with the resource rich African country.

The loan facility to be availed through the Infrastructure Development Bank of Zimbabwe will be given in tranches with the first US$10 million-tranche set aside for capital expenditure. The second tranche of US$20 million will go towards working capital.

Chinese Ambassador to Zimbabwe Xin Shunkang said the facility priced at 10 percent interest per annum was "only the beginning, bigger things will come in the near future."

Beijing has emerged as one of Zimbabwe’s most important political allies and trading partners since 2000 when President Robert Mugabe adopted his ‘Look East’ policy

The policy is premised on the need to find new trading partners and markets after traditional investors from Western nations turned against Harare in protest over Mugabe’s human rights abuses, repression against political opponents and his violent land reform programme.

The “Look East” policy specifically targets investors from Muslim and Asian nations and in exchange Zimbabwe has promised minerals – including diamonds and gold – and prime land to the investors, resulting in Harare penning several investment and cooperation agreements mainly with China, Russia and Iran.

While Harare has sought to deepen ties with its Eastern allies, Beijing has been on a drive to strengthen relations with African countries that hold vast mineral deposits and other raw materials the Asian giant needs for its manufacturing sector.

The facility advanced to Zimbabwe is part of a US$1 billion financial support package for African SMEs launched by Beijing at the Fourth Ministerial Conference on China-Africa Co-operation in 2009.

Post published in: Africa News

Leave a Reply

Your email address will not be published. Required fields are marked *