Tuesday, June 16, 2009

Local firms keen to lend R2.7bn to Zimbabwe

June 15, 2009 - Bloomberg

South African companies were willing to provide Zimbabwe with a R2.75 billion credit line once the ailing country had signed an investment protection accord, Zimbabwe's Finance Minister Tendai Biti said at the World Economic Forum (WEF) on Africa in Cape Town on Friday.

South African companies wanting to enter Zimbabwe included Netcare and FirstRand's FNB, Biti said. The investment accord should be signed by the end of this month.

The agreement was negotiated by ministers from the two countries in March and was supposed to have been signed in Polokwane on April 14, Biti said, but a problem had emerged with the wording of one clause.

"To me, it's really a problem of having too many lawyers involved."

Biti said he had met Minister of Trade and Industry Rob Davies last week and there was now "an understanding" on the wording of the clause.

"The principle at play was what is the application of the agreement in respect of land that was acquired in terms of the land reform programme. I think the South Africans were generous to accept that the land reform has happened."

But putting that into a legal phrase was the problem.

Earlier, Deputy Prime Minister Arthur Mutambara said that Zimbabwe's power-sharing government was "on a very positive trajectory" and should be given "a fighting chance".

The administration was redefining the role of the government to be an enabler and facilitator, leaving the private sector to be the "doers", he said.

The government acknowledged that it could not provide infrastructure, such as roads, telecoms and electricity, on its own. The parastatals it owned were in a dire state.

Mutambara said: "We are saying, as a government, we are no longer keen on owning 100 percent of a rat. It's better to own 10 percent of an elephant."

Biti said Zimbabwe's economy should expand more than 4 percent this year, as the unity government implemented fiscal and monetary changes and attracted foreign investment.