More funds for critical sectors - Zimbabwe Situation

More funds for critical sectors

Source: More funds for critical sectors | Sunday Mail (Business)

GOVERNMENT is planning to increase funding for the critical tobacco, gold and diamond sectors to encourage more generation of foreign currency for the country.

Finance and Economic Development Minister Professor Mthuli Ncube told The Sunday Mail Business last week that the surge in output gives the country hope for immediate economic turnaround if the sectors are capacitated.

“The record production in diamond, gold and tobacco shows that the country can be competitive,” said Prof Ncube.

“So these are the areas to invest in further going forward. We should identify and support those areas so that we grow our exports, earn more foreign currency and support the entire economy.”

This year, gold and tobacco production shattered 19-year production records.

Gold deliveries hit 28,2 tonnes in September this year, breaking the 1999 record haul of 27,1 tonnes. The performance is remarkable considering that it comes after a spectacular decline in production to 3,8 tonnes in 2008.

Interestingly, small-scale miners using rudimentary equipment such as picks and shovels account for almost 70 percent to the 28,2 tonnes delivered to Fidelity Printers and Refiners (FPR).

FPR is the gold buying arm of the Reserve Bank of Zimbabwe (RBZ).

Gold production has largely been spurred by increased surveillance by FPR, the Zimbabwe Republic Police’s minerals unit and crucially, the US$150 million Gold Development Initiative Fund introduced by RBZ Governor Dr John Mangudya two years ago.

So far, the RBZ has disbursed US$104 million out the US$150 million Gold Development Fund initiative.

Miners with bankable projects are being invited to apply and access the remaining US$46 million. This year, the tobacco sector hit 250 million tonnes and fetched US$730 million.

The output decimated the record of 236 million tonnes set in 2000. The RBZ has set up a US$85,3 million enhanced facility for lending to small-scale tobacco farmers.

About US$66,2 million will go towards procurement of inputs for the production of tobacco covering 51 000 hectares.

Inputs worth US$15,3 million covering 11 000ha have since been purchased and are being distributed.

The balance of US$19,1 million is set to fund the development and enhancement of tobacco infrastructure (curing and irrigation) by eligible small-scale tobacco farmers.

The RBZ has also set up a US$28 million facility for lending to small-scale tobacco farmers through Agribank and the Tobacco Industry and Marketing Board (TIMB).

The facility targets 18 000 smallholder farmers through provision of seeds and fertilisers, motorbikes and technical services.

In the diamond sector, Government last year capitalised the Zimbabwe Consolidated Diamond Company (ZCDC) to the tune of US$80 million through treasury instruments.

The investment resulted in organisational stability, investment in business growth and mining sustainability.

ZCDC has seen output sharply rising to 2,4 million carats between January and October this year, up from 1,8 million carats mined last year.

In 2016, ZCDC hauled 895 000 carats.

ZCDC is pressing ahead to achieve its 3 million stretch target.

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