US sanctions hit Olivine

sanctions list, sources said.
Olivine, a consumer goods company, is experiencing severe funding problems due to capital constraints.
The interception comes as it also emerged that OFAC is withholding IDC’s US$40 000 subscriptions to the Southern African Development Community Development Finance Sector. IDC owns 51 percent in Olivine, with the remainder owned by AICO Africa Ltd.

“Olivine had secured US$2,1 million from PTA Bank but the money was intercepted by OFAC. It was meant for recapitalisation,” said a senior official at the company.

IDC spokesperson Mr Dereck Sibanda, confirming the interception, said “these sanctions are causing unnecessary restrictions on business”.

“It has happened to Olivine and it is even happening to our joint venture partners. We don’t really understand how IDC or their related parties can cause threats to US foreign policy,” he said.

Efforts to get a comment from Olivine were unsuccessful at the time of going to print.
Western countries slapped Zimbabwe with illegal sanctions in protest over Harare’s land reform which saw repossession of land from a few white farmers.

But there has been a gradual easing of the illegal sanctions as a strategy by the West to normalise relations with Zimbabwe.

Last month, the European Union suspended travel bans and asset freezes on most Zimbabwean firms and people on its sanctions list after Zimbabweans approved a new constitution in a referendum.

Two weeks ago, the Infrastructure Development Bank of Zimbabwe and Agribank, both State-owned, were last week removed from the OFAC sanctions list as the West intensified its re-engagement efforts with Zimbabwe.

IDBZ said its removal from the sanctions by the US would unlock more lines of credit as the illegal embargo had barred the bank from securing offshore funds.

The bank said the lifting of the embargo reinstated unlimited business opportunities for the bank in the area of resource mobilisation, particularly securing offshore lines of credit and other forms of international funding which would allow the bank to deliver on its infrastructure mandate.

Olivine is currently engaged in discussion with a strategic partner over recapitalisation of the business.

High costs of production caused by production inefficiencies have rendered most of its products uncompetitive against imports, mainly from South Africa.