via ‘Zim too desperate to dictate funding terms’ – DailyNews Live 10 August 2014 by Ndakaziva Majaka
HARARE – Zimbabwe cannot afford to dictate terms and conditions when negotiating credit lines because the country is desperate, Finance minister Patrick Chinamasa has said.
He said the country is “forced to dance to the tune of those who avail loans”.
His remarks come on the back of industry players accusing him of facilitating shoddy tender bidding processes and side-lining local businesses.
“Like I said… it’s always important to realise where you are and craft policies to get out of your situation,” he told a Buy Zimbabwe Public Procurement conference on Wednesday.
“And where we are now is that we have a huge power deficit and I cannot afford the luxury of insisting on procurement locally,” he said.
Chinamasa said the few countries willing to offer Zimbabwe money had models limiting the procurement and purchase of equipment to their home companies.
“The thing is, the model for China, India… is basically to say if you are borrowing money they supply the equipment and their companies will do the construction,” he said, adding that “they (lenders) will not give you money for a company somewhere else to do the work”.
Chinamasa said the only lenders that encouraged transparent processes are Bretton Woods Institutions that at the moment, are not entertaining Zimbabwe due to its huge debt.
“Only if we got a loan from the World Bank can we put it up for open tender and it is then and only then that the pricing and tender process be competitive and open,” he said.
Currently, the World Bank and International Monetary Fund (IMF) have refused to lend Zimbabwe until it clears its debt arrears.
In March, the IMF said the hard pressed southern African nation must engage its creditors to arrest economic collapse.
The country, saddled by a debt of approximately $10 billion, is struggling to secure international lines of credit and external budgetary support.
“It will be necessary to engage with the country’s creditors to work towards a solution to the long-standing debt arrears problem,” the IMF said.
Economic analysts have also warned that Zimbabwe’s foreign and domestic debt will continue to undermine the country’s creditworthiness and compromise its ability to secure new funding.
This comes as the country — which adopted the IMF’s recommended staff monitoring programme in June last year, to help it clear external debts and give it access to new credit from international lenders — has indicated it will make a “token payment” to the international money lender to reduce its debts.
“We’ve entered into a payment plan,” Chinamasa has said.
“It’s a token payment because we don’t have the capacity right now to service the debt.”
Zimbabwe’s economy is recovering from years of collapse, prompted by a political crisis that hit its currency and caused hyperinflation.
COMMENTS
Don’t worry-money will soon pour in as a consequence of the wonderful investment climate, rule of law, transparency, the pluralistic society and zero corruption. Why it has not yet happened is beyond my understanding.
LOL… Yes it is strange, however, Zimbabwe is blessed with those high tech, super quality developments made by the Chinese at favourable and cheap rates with no real repayment schedules…
There is a way to fix this problem, but Zanu PF is not up to it.
And on top of it all, their arrogance.
Only good thing about our situation is that people by now can see how a country should NOT be run!
Chinamasa said the only lenders that encouraged transparent processes are Bretton Woods Institutions…Well come back to reality you dummies. Havent we been telling you to stay away from the damn Chinese
Chinamasa said the only lenders that encouraged transparent processes are Bretton Woods Institutions…Welcome back to reality you dummies. Havent we been telling you to stay away from the damn Chinese
Why worry about repayment terms zanupf haven’t paid much back over 34 years just borrow some more to squander on luxury cars and overseas trips
for years zanu has borrowed money to steal it and leave the country the debt.wake up people.
Now you see the difference between your all weather friends and the World bank which you always lied to us that they imposed sanctions on the country yet the truth is that you didn’t service your loans. The truth will always come out Chinamasa, learn that.
The final countdown !!!!!!!!
It is always nice to see the ZANU’s being brought down by their own failings. Lets have more of this.
Let them stew in the broth of their own making …
Smith did not reduce the country to be so cheap as what has become under Mugabe. See how these rascals would mortgage our once resourceful country to, of all people the Chinese..!!
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Chinamasa, mavakutitengesera nyika so cheap to the Chinese? What about our future generations? You now want mortgage our country minerals to Chinese merchants!! C’mon!
Come on Chinamasa, take that mask off and get a life!!
Is Chinamasa slowly waking up from a long slumber to the hard reality of what ZPF have done to Zimbabwe? They can blame no one but themselves. Who has been in power since 1980?????? They are the ones! The buck stops at the top.
so Chinamasa now learns what its like in the real world of the US dollar – but i still think he will be in the clear when the cheque for USD 27 billion comes from China to fund Zimasset – its in the post i am told !!
These guys cannot see past their noses. The very very simple solution is to start from the beginning. Job creation and services. For that to work you have to create a good environment for the investors to enter. How would you expect someone to invest his money to let people who have failed in the firs place control 51% of any project or business. A lot of these people have failed to run companies in the first place. Chiyangwa bought Zecco in Bulawayo. what did he do with it? This was a booming company with all the cranes and equipment.Every where they touch they destroy. Mpofu owns a lot in Bulawayo. How many people does he employ? All these are questions that need answers. NRZ, GMB, just to name a few. All run to the ground. Finally Hubert Humphrey once said:..the moral test of government is how that government treats those who are in the dawn of life, the children; those who are in the twilight of life, the elderly; those who are in the shadows of life; the sick, the needy and the handicapped. “
Farm invasions = rule of law = investments = more and more loans!!!
So true, so simple – so impossible
These fools think they can behave like Bandits and all will be OK. Not so – and the Chinese know a good bargain when they see one, so Zanu has sold the nation to them.
And thinking of Bennett, Patsy is a hell of a one to act surprised
Just think – without the Land Grab and the Mining Grab and the Business Grab – we’d not need to beg for loans.
Oh come on Patrick. We are not that gullible. We know exactly what is going on. Time for you to make a choice
We don’t need funding ! We need people who can withstand hardships and come up with solutions!
I will say it again as if NEW. Zimabwe’s economy must start LOCAL. Internal trade of barter and trade relations, then LOCAL currency deals where people source what they want from WITHIN, close all borders and leave international trade to the few who know how hard to get a real $. Let local, indigenous, small business boom and then start selling to the outside world.
This business of buying jets before you build runways, this idea of driving mercs in dust roads, this quest to live like the Johns, is what has reduced us to a laughing stalk. Vana Mugabe naana Grace kuda zve Singapore, leaving behind a track of poverty, this is what put us where we are.
No wonder we still have judges who dress like the British judges. No wonder we have a president who is driven around with 3 ambulances following the motorcade. Why are you imitating a lifestyle that is so foreign? Why?
Bring back the Zim$ and be professional with it. Let us produce enough until we can no longer stock excess food and products.
And I have very simple solutions to our problems. LOCAL CURRENCY. We print our money, we count it and monitor its circulation. We burn excess money to curb inflation. We pay our people timeously. We employ them to build roads, rails etc. Plenty of work in Zimbabwe.
Just do what was being done before you employed tea-boy-cum-doctor Gono uyu wemazero ake uyu mhani!