via Govt to use minerals for loans, minister – NewZimbabwe 16 April 2015
THE government is moving to use mineral resources as security for external loans to help revive the economy, says a cabinet minister.
Securitisation of minerals is the practice of using expected or future revenue from minerals to guarantee a loan facility mainly from financiers.
The development was confirmed by war veterans minister Chris Mutsvangwa in Norton on Wednesday.
Mutsvangwa told journalists that many investors were keen to pump money into the local economy.
“Zimbabwe is on the verge of realizing the possibility of using its minerals as a security to raise funds on a grand scale so that we can now pump new investment into our economy,” said Mutsvangwa who added that the country had shifted focus from loans and grants to foreign direct investment (FDI).
“Hitherto the economy has been driven by loans and grants but these are very small agents in terms of national development.
“A country takes off once it begins to attract foreign direct investment. Loans are no longer the main driver of the new Zimbabwe Agenda for Sustainable Socio-Economic Transformation (ZIMASSET) structure, its equity.”
Mutsvangwa said there was much interest to invest in Zimbabwe being shown by delegations from as far as Europe.
“This is the prospect which we now face at 35 years of independence and the main selling point of course is the political stability of Zimbabwe,” he said.
“Even the European Investment Bank is in the country and China’s biggest investment institutions are setting up an office in Zimbabwe …
“ … and they are looking at using Zimbabwe’s mineral resources as a means to secure funds which are then pumped into the economy so that we can have new roads, rail, among others,” he said.
There have been reports that the government requested the African Development Bank (AfDB) to assist with drafting the framework which the country could use to leverage its resources for accessing lines of credit to revive the economy.
Zimbabwe needs US$27 billion to finance projects espoused in the ZIMASSET blueprint, which will guide the government’s economic programmes until 2017.