Zim gets $4,1m EU loan

via Zim gets $4,1m EU loan – DailyNews Live  16 FEBRUARY 2014 

Zimbabwe on Friday received a $4,1 million loan from the European Union (EU) aimed at reviving the private sector.

The bail-out comes at a time the sector — which had recovered from a decade-long recession following the formation of a coalition government in 2009 — is now showing signs of strain with capacity utilisation hitting new lows.

According to the Confederation of Zimbabwe Industries (CZI)’s 2013 Manufacturing Sector Survey, capacity utilisation declined by 5,3 percent from 44,9 percent in 2012 to 39,6 percent in 2013.

Experts say most companies are failing to replace antiquated machinery, relegating their competitiveness.

Industry minister, Mike Bimha, said the loan would help recapitalise the local manufacturing sector amid concerns that some firms could be facing imminent closure.

“This programme is coming at an opportune moment for the country as it is aimed at capacitating the private sector to meaningfully contribute towards the current efforts by government to revive the economy and also strengthen the capacity of all economic players in the implementation of the interim Economic partnership Agreement (EPA) with the EU”, he said.

Bimha noted that the $4,1 million funding will run for two and half years starting this February and would be administered by the International Trade Centre.

“I have been informed that besides the programme we are launching today, we have another $7,1 million in the pipeline made up of $1,3 million to support the implementation of the EPA and another $5,7 million from the regional fund to support regional integration and development,” he said.

Aldo Dell’ Ariccia, EU’s ambassador to Zimbabwe, said the trading bloc was keen on expanding economic relations but policy discord on the part of the southern African nation was affecting investors.

“There is lack of clarity of policies. There must be transparency and accountability on these policies. You tend to hear contradictory sentiments from one official to another especially on indigenisation”, Dell’ Ariccia said.

He said Zimbabwe needed to turn its blueprint, Zim Asset, into a strategic document which will help investors come in.

“The document is silent on where the funding for all those projects will come from. There is need to clarify some issues if you want to attract investors.”

The time span given by government for the implementation of Zim Asset is also short as there was critical need of foreign direct investment, he said.

The government needs around $27 billion to implement the economic blueprint, a huge amount by local standards considering that its budget has $4 billion annually in the last three years.

Economists, industrialist and labour experts have warned that 2014 will be a tumultuous year for the country’s industries with more companies sliding into liquidation, resulting in job losses.

Zimbabwe’s industry — still suffering from the hangover of a decade-long economic crisis — has been bleeding due to cheap Chinese imports since 2009 when government liberalised the economy, according to economists.

Nearly 100 companies have closed down in the country’s second capital city Bulawayo since 2010, putting out of work an estimated 20 000 workers, with the remaining companies scaling down their operations or relocating to Harare.


  • comment-avatar
    John Thomas 8 years ago

    Who will be managing and dispensing this money? If it is the government or CZI it is already as good as stolen.

  • comment-avatar
    Old Man River 8 years ago

    Four million? Against a requirement of 27billion? And a loan, to boot? The diplomatic insult is one of the few skills that monstrosity of an organisation – the EU – has ever mastered.

    • comment-avatar
      Nkiwane (M'kiwa) 8 years ago

      But what does the EU owe to Zimbabwe? Nothing! They have no connection to Zimbabwe whatsoever – the Germans, Belgians, French, Polish, Spanish, Swedish etc. NO CONNECTION!

      The only ones connected to Zim are the British and they have been very clear that the will fund essential programmes only, with clear accountability and transparency, which the Gukurahundi Brigade in Harare cannot provide. Because the are thieves! Big, fat, disgusting, thieves!

  • comment-avatar
    Wilbert Mukori 8 years ago

    “There is lack of clarity of policies. There must be transparency and accountability on these policies. You tend to hear contradictory sentiments from one official to another especially on indigenisation”, Aldo Dell’ Ariccia said. The Ambassador would do even better if HE clarified the EU’s policies first!

    Is the EU joining the Israelis and Chinese in playing dirty political games at the expense of the long suffering ordinary Zimbabweans? Is this $4.1 million the start of the EU’s financial bailout of the Mugabe regime; the first down payment of the country’s $27 billion ZimAsset request? Or is it just a sweeter to buy EU access into Zimbabwe’s murky diamond business and once in the EU, like the Chinese and Israelis before them, will not be spending a penny more? In other words the country will still be in the latch it is in right now of serious economic melt-down because the very reasons the Ambassador himself is talking about – lack of clarity, transparency and accountability!

    Like it or the lifting of some of the sanctions, this $4.1 million from the EU, the invitation of Mugabe to Brussels, etc. will be seen by Harare as “proof” that the EU has relented and is ready to do business. The regime has taken on the mighty of the West pushing for regime change and won! Now it is already repeating the benefits in all these concessions from the EU. As far as Mugabe is concerned, the rest of the Western countries will all soon fall in line!

    “The British did not know what hit them!” Mugabe boosted after the rigged elections. His refusal to release the voters roll, the smoking gun as to how he rigged the vote is only another dimension of his mastery, as far as he is concerned.

    The Mugabe regime is not going to soften its stance on indigenisation; the best the EU can expect is silence. As for meaningful democratic reforms, the basis and only hope for free and fair elections in 2018, Mugabe will never ever implement not even one reform.

    The EU must know that by offering Mugabe the false hope that he can stay in power, keep his corrupt and autocratic ways and still achieve some economic recovery; they EU is betraying the ordinary people who will continue to suffering the consequences of further economic melt-down. And worst of all, the EU will have closed the nation’s hopes of ever holding free and fair elections in 2018!

    No, Ambassador Aldo Dell’ Ariccia it is the EU that must take a firm standing against Mugabe and his tyrannical regime after blatantly rigging the July 2013 Zimbabwe elections. It is the EU that must stop posy-footing around!