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(TALKZIMBABWE) R2.75 billion credit lines for Zimbabwe

R2.75 billion credit lines for Zimbabwe
Tendai Midzi
Mon, 20 Jul 2009 01:10:00 +0000

ZIMBABWE is set to secure 2.75 billion rand (339.5 million U.S. dollars) worth of credit lines from South Africa's private sector when the two countries meet next month to sign the Bilateral Investment Promotion and Protection Agreement (BIPPA).

The BIPPA accord will outline new measures that could help Zimbabwe secure fresh capital from Africa's largest economy following a call by the Business Unit South Africa (Busa) for more secure guarantees last April.

The agreement, which was negotiated by finance and investment ministers from the two countries in March, was "blocking capital and leverage" in Zimbabwe's economic recovery.

The signing of the agreement between the two countries was delayed after Zimbabwe objected to a clause in the accord referring to land and investments on land.

South Africa is Zimbabwe's biggest trading partner on the continent.

Minister of Economic Planning and Investment Promotion Elton Mangoma said the investment promotion agreement will be signed by end of next month.

Mangoma did not disclose further details on the trade pact, adding that it could have been signed months ago had it not been South Africa's April elections.

Sources revealed that in the bilateral framework agreement, Zimbabwe undertakes to accord South African companies national treatment, relaxed foreign equity restrictions, uphold free movement of capital, both dividends and disinvestment proceeds and provide political risk cover for the cross-border investments.

In April this year, South African business mogul and Busa president Patrice Motsepe led a 22-strong delegation into meetings with President Robert Mugabe, Finance Minister Tendai Biti and local business leaders.

The negotiations that followed focused mainly on investment guarantees and instruments of property rights protection, resulting in the drafting of the accord.

A number of companies from South Africa's agriculture, mining, pharmaceutical and financial sectors, notably First National Bank (FNB), Nedbank, Aspen Pharmacare, Netcare Limited, African Rainbow Minerals and First Rand Limited, have revealed that they are ready to set up shops in the country.

Analysts contend that companies are strategically positioning themselves to capitalise on the pent-up potential that has been locked up by prolonged challenges that have been linked to the stand-off between the country and international financiers.

Since the beginning of the year, Zimbabwe has taken several measures to strengthen the local investment climate, including there moval of sector restrictions on foreign ownership, relaxation of exchange control regulations, the establishment of a one-stop shop for foreign direct investment (FDI) to cut investor turnaround times, and commitment to protect private investments.

Labels: CREDIT FACILITIES

posted by MrK @ 3:06 PM