via Bulawayo24 NEWS | Zimbabwe urged not to mortgage minerals. 13 June 2014 by Staff reporter
The World Bank has warned Zimbabwe against mortgaging its minerals, saying this jeopardises future generations’ welfare.
Nadia Piffaretti, the World Bank’s senior economist, told a news conference on Wednesday that the hard-pressed southern African nation would be better advised to seek loans at concessionary rates instead of securitising its minerals to secure loans.”Securitisation of minerals is one way of financing things,” Piffaretti said.”However, it brings a lot of risks.
It’s not an easy solution because you might end up giving away more than you are getting.
“It’s not really advisable at your development stage because you might just take away the future of your children.”
Piffaretti said instead, Zimbabwe must seek loans, which have clear-cut terms and conditions.
“Securitisation is a legitimate tool in the toolbox but it is not advisable,” she warned.
This comes as Zimbabwe, which is struggling to secure $27 billion to finance its economic blueprint ZimAsset, recently directed diamond firms to deposit their gems with the Reserve Bank of Zimbabwe as part of wider efforts to secure external loans by securitisation of minerals.
Zimbabwe has an external debt of approximately $10,7 billion.However, China – considered an all-weather friend of Zimbabwe – has indicated that it wants the southern African country to use its minerals to guarantee future loans.
Faced with a biting liquidity crisis and the urgent need to recapitalise industry and increase its capacity, which fell from an average 44,6 in 2012 to about 39,6 percent in 2013, government is making frantic efforts to mortgage the minerals to the emerging Asian giant.
Thabani Nyoni, the Bulawayo Agenda director, recently said while there was nothing wrong with Zimbabwe funding its development with minerals, the earmarked deal with China raises a lot of concerns.
“What they are doing is tantamount to mortgaging the country because government agreed to securitise with minerals it does not know how much they are worth,” he said.
Nyoni noted it was not clear whether the deal, although adhering to the ZimAsset proposals, did not violate other government policies such as beneficiation and indigenisation.Securitisation of minerals is one of the proposals made in the Zanu PF government’s economic blueprint, ZimAsset, to fund development for the next four years.
COMMENTS
The opposition should make it clear that zanu is an illegal regime and that any such arrangements will not be honored by a future government
Cheated out of your hong kong mansion,then your trucks,.after all this you decide whether to allow them to cheat you of “your”zimbabwe .is it desparation or a wish to leave nothing at your death
Has someone omitted to ask Robert Mhlanga who has been apointed to the Dubai Diamond Exchange and Enock Kamushinda inMalyasia where the loot is ?
Zimbabwe has enough resources to fend for itself. What it lacks and desperately needs is a leader with a vision, the stamina and self respect willing to swallow their pride, admit their weaknesses and start afresh. Mugabe is selfish and only interested in power,hardly ideal a leader in a mordern world.
Too late Zimbabwe has already been mortgaged to Mugabe’s masters China!
So true and they still preach empowerment and sovereignty when all is bone. Wakeup Zimbabwe, Mugabe is the most notorious con man ever to come out of Zimbabwe.
We are all being coned big time.
I am worried we are going to mortage minerals and little meaningful development takes place becoz of corruption and our kids will foreign countries mining our minerals whilst the borrowed money is stashed in foreign accounts due to corruption.
Please dont sell the car to raise money for its tyres. Our minerals are worth more than 27 bn….