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(TALKZIMBABWE) Zim, China sign US$8 billion investment deals

Zim, China sign US$8 billion investment deals
TH/TZG
Thu, 19 Nov 2009 04:10:00 +0000

LOCAL Government, Urban and Rural Development Minister, Ignatius Chombo (left), Finance Minister Tendai Biti, outgoing Chinese Ambassador to Zimbabwe Yuan Nansheng, Higher and Tertiary Education Minister, Stan Mudenge and Industry and Commerce Minister Welshman Ncube (far right) pose in front of one of the 173, 20 tonne containers used to ferry 4 000 tonnes of soya bean seed donated to Government by the Chinese government. The seed was officially handed over by Mr Nansheng to Minister Biti at a function held at Olivine Industries in June 2009.

THE government of Zimbabwe and a Chinese joint venture company yesterday signed five strategic co-operation agreements that will see the country receive US$8 billion in investment deals in several sectors of the economy.

The deal with China Sonangol, a joint venture company between China and Angola, represents the single largest foreign direct investment since the formation of the inclusive Government and one of the largest since independence.

The investment will be in gold and platinum refining, oil and gas exploration, fuel procurement and distribution, and housing development.

A "significant" amount of the money is already being held by local financial institutions involved in the deals.

In a speech after the signing ceremony, the Chief Secretary in the Office of the President and Cabinet, Dr Misheck Sibanda, said the deal was an indication of the success of the Look East Policy adopted by Government four years ago.

"The signing of the five Memoranda of Understanding bears testimony to the relevance and efficacy of the Look East Policy.

"It is hoped that the co-operation will continue to grow from strength to strength and through such efforts it is only a question of time before Zimbabwe becomes the jewel of Africa," said Dr Sibanda.

Zimbabwe requires approximately US$8 billion to revive the economy as envisaged under the Short-Term Emergency Recovery Programme, but the mobilisation of funds has been affected by the illegal sanctions imposed on the country by some Western countries.

Dr Sibanda urged these countries to remove their economic embargo on Zimbabwe to facilitate expeditious turnaround.

"We continue to call for the removal of illegal Western sanctions in order to speed up our economic recovery process," said Dr Sibanda.

He said Zimbabwe remained committed to addressing all issues of concern to allay any fears foreign investors might have.

Reserve Bank of Zimbabwe Governor Dr Gideon Gono said the deals signed yesterday were of great importance to Zimbabwe’s economic recovery.

"This deal represents the most significant inward investment inflow in Zimbabwe. This comes at a time when the country is being ridiculed left, right and centre.

"The various banking and financial institutions that are handling this deal can’t believe the huge inflows that have come in already," he said.

He could not reveal how much exactly had already come in, but emphasised once more that it was a significant figure.

Dr Gono applauded the Chinese for being all-weather friends, especially during the difficult times the country experienced over the past decade.

China Sonangol chairman Manuel Vicente hailed the historically good relations between Zimbabwe, China and Angola.

"Zimbabwe, Angola and China enjoy good relations in their South-South co-operation. Zimbabwe is a land of opportunities with great potential," he said.

Company deputy general manager Kelvin Kwan confirmed the huge amounts of money involved and expressed confidence in Zimbabwe’s economy.

At the recent Forum on China-Africa Co-operation summit in Egypt, Chinese Premier Wen Jiabao and President Mugabe held bilateral talks after which Zimbabwean Foreign Affairs officials revealed that Beijing would soon unveil a new development assistance package.

China has stood by Zimbabwe since the days of the liberation struggle.

Over the past decade when the West began its onslaught on Zimbabwe over the revolutionary land reform programme, Beijing has been instrumental in keeping the economy afloat.

China has provided support in various sectors including agriculture, health and manufacturing, and has defended the country against machinations by Western countries to have the country put on the United Nations Security Council agenda. -

Political analyst, Dr Tafataona Mahoso, said the world should realise that the West was not interested in helping developing countries and was more concerned with protecting its own interests.

"This pledge made by the Chinese is a sign that those who are interested in providing bullets and guns to peaceful nations are not capable of providing economic assistance and expertise. Our people need not to look just to the West for solutions." He said Western "aid" came with stifling conditions that compromised independence.

Zanu PF Politburo member, Dr Sikhanyiso Ndlovu, said China's pledge strengthened the relationship between the two countries.

US$5 billion loan deal

In July this year, the government revealed that Zimbabwe and China signed a US$5 billion loan deal securing half of the amount the inclusive Government needs in delivering its Short Term Emergency Recovery Programme (Sterp).

The deal became the largest deal that has ever been signed between the two countries and is secured on various mining and infrastructural development rights.

Sources in Harare say Finance minister Tendai Biti and Reserve Bank officials on June 8 signed a Memorandum of Understanding (MoU) with China Exim Bank (CEB) guaranteeing the loan.

CEB is the export and credit guarantee agency of the Chinese government in Africa. The bank has played an important role in fostering the rapid expansion of Chinese trade and investment in Africa.

Under the deal Zimbabwe will get US$5 billion from CEB and in return the Chinese get some equity in a US$40 billion platinum concession.

Prime Minister Morgan Tsvangirai at the time, also announced that Zimbabwe had secured a US$950 million credit lines from the Chinese government.

Labels: CHINA, ZIMBABWE

posted by MrK @ 12:14 PM