CZI pursues P500 million credit facility

Ngonidzashe Chiutsi, Business Correspondent
THE Confederation of Zimbabwe Industries (CZI) has said it is still pursuing the P500 million line of credit promised by Botswana in 2009 which was meant to capitalise local companies.

In 2009 Botswana pledged assistance to local industries through lines of credit to the tune of P500 million (US$69m) but the money was never released. CZI president Mr Busisa Moyo said in an interview on Friday they were still following up on the promise from their Botswana counterparts.

“We intend to follow this up but also to structure new relationships and initiatives that suit and are tailored for current and real business needs, like trade facilitation, re-tooling, joint value chain collaboration and more specific transactions and opportunities for our members and the Zimbabwean business community,” said Mr Moyo.

The P500 million credit facility was signed by Zimbabwe and Botswana to help revive distressed manufacturing firms and agriculture. Commercial banks in Botswana had agreed to participate in the facility.

Under the terms of the agreement, the two countries agreed that the facility would cover the export of goods and services from Botswana to Zimbabwe as well as joint venture deals. About 70 percent of the funds were to be allocated to the manufacturing sector, while the remaining 30 percent was to go towards other sectors of the economy.

The credit facility was to be bankrolled by commercial banks after getting a guarantee from the Gaborone government. Most local companies need huge capital injections to boost production and replace ageing equipment.

According to the Ministry of Finance the manufacturing industry and agriculture each require more than $2 billion in fresh financing per year to recapitalise operations. A delegation from CZI is visiting Botswana from Wednesday to Friday and plans to meet a number of companies and potential investors in Gaborone and Francistown.

“We will be meeting with potential customers, investors, potential partners where factories can be built in Botswana and leverage synergies and market links for Zimbabwe market, access to Mozambique and Malawi where Zimbabwe is a key trade route for Botswana companies,” said Mr Moyo.

The trip to Botswana is among many CZI intended to embark as part of creating synergies between the local business community and those in other countries.