adminLast year, the External Loans Coordinating Committee approved short-term facilities amounting to $3,3 billion up from $2,69 billion approved in 2011.
The approvals were spread across nine sectors of the economy, with the financial and agricultural sectors accounting for the highest values of $1,13 billion and $976,8 million respectively.
In his monetary policy statement presented last week, Dr Gono bemoaned the low loan utilisation levels.
“Regrettably, the utilisation of approved facilities remained low at 33 percent in 2012.
“This compares unfavourably with utilisation figures of $1,28 billion or 47 percent of total approved facilities realised in 2011. The decline in utilisation levels reflects the effects of failure by the borrowers to meet stringent conditions precedent on the facilities and availability of alternative sources of financing,” he said.
Of the $1,13 billion approved to the financial sector $366,6 million was utilised while $446,5 million of the $976,8 million approved was utilised by the agriculture sector.
No funding was approved for the energy and transport sector in 2011 and 2012.
Dr Gono said the stringent borrowing conditions were prompted by the country’s external debt overhang.
“In this regard, the expeditious resolution of the country’s external debt should continue to rank high on Government priorities,” he said.
Zimbabwe has an external debt of $10,7 billion.
An economic commentator Mr Peter Mhaka said the country should devise mechanisms that reduced its foreign debt in order to loosen the stringent borrowing requirements on the loans.
“The low utilisation of approved funds as enunciated in the monetary policy statement is attributable to stringent conditions upon borrowing.
“To move forward, the country needs to reduce foreign debt from multi-lateral institutions such as the World Bank and the International Monetary Fund and other regional institutions.
“If that happens, when the country borrows, the loans will be offered at lower interest rates, which also cascade to firms in different sectors, when they apply for loans,” he said.
Online Reporter